A crypto breakout feels like a classic “will they, won’t they” situation right now.
Kind of like Ross and Rachel, or Sam and Diane for older readers, but with more stakes on the line. Or less, depending on your emotional investment in Friends and/or Cheers.
Quantitatively speaking, some of the ingredients for a prolonged bitcoin rally are there.
The 50-day and 200-day moving averages performed a golden cross on February 6, and the price action was somewhat mirroring that seen before the record pump to US$69,000 in late 2021.
Macro conditions, obviously, were vastly different back then, with stimulus checks flying around and central bank interest rates barely above zero.
Today we have very little money flying around and interest rates approaching 5% in the US and over 4% in the UK.
This could actually be a good thing in the long run - a rally for bitcoin would be built on more sustainable foundations than the one seen back in 2021, when funny money sent the global risk-on markets into a buying frenzy that was ultimately a bubble.
A lot will be riding on what emerges from the Federal Open Market Committee (FOMC) minutes to be released on Wednesday. Should the hawks fortify the US dollar, we might want to fortify our patience, but if the doves wrest control of monetary policy, it could prove the right catalyst for a breakout.
In the meantime, the BTC/USDT pair appears to be consolidating higher than the previous 23k to 24k range.
Bitcoin (BTC)- consolidating higher? – Source: capital.com
The pair is currently changing hands at US$24,500, pretty much where it closed five days ago.
Price action over the weekend was fairly muted, with BTC/USDT nudging 0.25% higher on Saturday and dropping 1.5% on Sunday.
As for Ethereum (ETH), the ETH/USDT pair dipped around 0.8% over the weekend, from US$1,693 to US$1,679, before adding a percentage point this morning.
At only a few bucks below the psychological US$1,700 line, a break above could provide the impetus to push the pair as high as US$1,750, where the Binance order book shows a pretty convincing sell-side resistance wall.
In the altcoin space
Global cryptocurrency market capitalisation has made nearly 11% of headway in the past seven days, encouraged by a couple of key large-cap altcoins.
Firstly there’s Polygon (MATIC), which is currently sitting right on US$1.50 having surged 24% week on week. MATIC/USDT did slip over the weekend, but Friday’s hefty 11% add means the pair remains in a strong position.
Polkadot (DOT) managed to hit a five-month high of US$7.90 on Saturday, while Solana (SOL)’s 26% week-on-week gain was pushed higher by today’s news that the popular Helium (HNT) internet-of-things project is migrating to the Solana blockchain.
Stacks (STX), an ambitious project focused on enabling smart contract capabilities on bitcoin, was the largest overnight riser, adding more than 50% to its market cap, which currently stands at US$846mln.