The Biggest Selling Risk Since the Collapse of 3AC: 5 Things to Know About $BTC This Week

Bitcoin is avoiding tariffs and massive sell-offs as the strong upward trend from February continues this week. The price of BTC is predicted to immediately reverse due to "very thin" liquidity as the wider trading range continues. CPI week is coming, while Fed Chairman Jerome Powell will have to testify twice before US lawmakers. The tariff negotiations are back, this time involving many US trading partners - and so far, only gold has benefited from this outcome. Whales are still in full distribution mode and have been since the end of last year. Do they know something the market doesn't? Not everyone has an optimistic view of this outlook. A series of new predictions about cryptocurrency prices show that Bitcoin will start a journey to $700,000 from this quarter. Order Book 'Very Thin' Sets the Stage for BTC Price Action BTC price fluctuations have not surprised traders as the price increased or decreased after a week of continuous decline, giving way to modest gains at the beginning of the week. Data from TradingView shows BTC/USD fluctuating around the center of a clearly defined trading range.

Speculations about the new customs tax rates planned by the US government did not create strong fluctuations as last week, when traders were still waiting for the next market momentum. "The slow fluctuations over the past 4 days are normal to fill most of the gaps," famous trader CrypNuevo summarized in a thread on X on February 9th. "I think this week we might see some more volatility due to Wednesday's CPI, so we might see real action next week after that event."

CrypNuevo refers to the upcoming macroeconomic data of the United States, including the Consumer Price Index (CPI) figures of January (. "The order book is currently very thin, the price action is very slow, and there are no strong signals to determine whether it will increase or decrease," they added, citing $94,000 as a potential short-term bottom if a liquidity hunt occurs.

Cryptocurrency trader, analyst, and entrepreneur Michaël van de Poppe is more optimistic when seeing the potential for a full market recovery in the coming days. “A good start to the week with an increase after opening on Monday,” he commented, referring to the current underperformance of altcoins and Ether against BTC. "I think we will see strong momentum with multiple daily price increases ending with the elimination of the entire liquidation from last week on Altcoin. If $ETH / $BTC rises, it is likely that the uptrend has begun."

Others argue that there is no need to worry too much about the strength of the BTC price until a wider range is challenged in terms of increase or decrease. Famous trader Poseidon describes the situation as "in the range of 90,000-110,000 for 3 months, but everyone thinks this is the macro peak and bottom in this range, while nothing happens on the weekly/monthly chart". "We are within range and as long as we don't break and accept below that level, I doubt we will see anything lower than 70,000," they argued. "The vague retreats to below 85,000 are still bullish signals and healthy )check the weekly EMA 21, liquidate the low range(."

Poseidon refers to the 21-week moving average of Bitcoin, currently at $89,200. Powell's testimony leads to a chaotic macroeconomic week A series of familiar US macroeconomic data combined with the testimony of Federal Reserve Chairman Jerome Powell were released this week. The Consumer Price Index (CPI) and the Producer Price Index (PPI) for January will be announced on February 12 and 13. In the future, it will be the data on unemployment benefit claims, a weekly announcement playing a role as a short-term catalyst for the cryptocurrency market in recent months. Starting from February 11, Fed Chairman Powell will testify before the Senate Banking Committee and the House Financial Services Committee. Events are taking place against a backdrop of mixed signals on inflation, with Powell remaining staunch on the prospects for 2025, including further interest rate cuts - a critical issue for risky assets. According to the latest estimate from CME Group's FedWatch tool, the likelihood of the Fed cutting interest rates by 0.25% at the next meeting in March is only 6.5%, down from nearly 15% last week.

However, when monitoring the developments at the Fed, The Kobeissi Letter trading source noticed a "worrying" phenomenon occurring. The US )RRP( reverse repo facility has dropped to its lowest level since the beginning of 2021 — a sign that the quantitative tightening financial policy may not last long despite the Fed's tough stance. "Less money in the RRP means more money in the market. With 2.5 trillion dollars depleted, does this mean the Fed can no longer inject liquidity into the market?" Kobeissi asked in a part of the X series on this topic over the weekend. This could really mean the end of the tightening policy is coming. This could come with a liquidity shock.

Trade war enters the second round. The specter of last week's trade war panic continues to spread in the market as the US government plans to announce additional tariff plans. Targeting steel and aluminum, these general measures aim to balance the current tariffs applied between US trading partners. As a result, the cryptocurrency market weakened at the end of the week, while the US stock futures contract remained indifferent to this news, in stark contrast to the developments of the previous week. A major volatility in risk assets occurred in early February when broad-based indices sharply declined as the United States proposed tariffs on Canada and Mexico, although they were ultimately postponed for 30 days. Kobeissi told X followers: "Get ready for more volatility this week," adding that "headlines about trade wars unfolding will continue from last week's volatility."

The clear winner in the current situation is gold, as the price of gold has repeatedly reached new record highs last week and for the first time approached $2,900 an ounce on February 10th. Although traditionally, Bitcoin has been slower than gold by a few months, the fact that Bitcoin cannot capitalize on the demand for safe haven is still noteworthy. "With all the strength and adoption rate that Bitcoin has received in recent years, it is VERY INTERESTING when $BTC has had to struggle to break free from Gold," famous trader Peter Brandt commented on that day.

Some people believe that the classic chase game is just a matter of time. "Gold creates a new ATH every day. About +50% compared to the previous ATH", crypto entrepreneur Alistair Milne commented on X. "Bitcoin has only increased +40% compared to the previous ATH and has a much higher beta... you're not optimistic enough." Whales distribute BTC with an average of 9x per year Bitcoin investors continue to demonstrate a different attitude when it comes to the level of risk at the current BTC price. In its latest findings, the blockchain analysis company Glassnode shows that while retail investors have increased their BTC buying activity, whales have reduced their exposure since BTC/USD first reached $100,000 in the fourth quarter of last year. Since mid-December, retail investors )≤1 $BTC( have been accumulating Bitcoin at a faster pace, averaging 10,627 BTC per day - 72% faster than last year's average of )6.177 BTC/day(, according to a report on X on February 7th.

On the contrary, the whale has increased its daily distribution volume by eight times compared to the annual average - about 32,500 BTC per day. Whales, traditionally considered as "smart money", predict market changes, frequently switching between accumulation and distribution. Glassnode data shows that 2024 is no exception.

Continuing, Andre Dragosch, the European research director at Bitwise Asset Management, emphasized that the immediate selling pressure on exchanges is at its highest level since the collapse of the cryptocurrency hedge fund Three Arrows Capital, also known as 3AC, in mid-2022. “However, the price is still close to 100,000 USD,” he added along with the corresponding data from Glassnode

700,000 dollars Bitcoin, 16,000 dollars Ether? When it comes to cryptocurrencies benefiting from a significant increase in macro liquidity, holders may not have to wait long. In his latest price prediction round, Bill Barhydt, the founder and CEO of Abra, a cryptocurrency asset management company, said that Bitcoin will begin its journey to reach its peak cycle - a massive $700,000 - starting from the first quarter of this year. You mentioned that the reason lies in the current economic situation of the United States, implying that the era of quantitative tightening and other restrictive measures of the Fed is coming to an end. "My model is very simple," he explained to X followers this weekend. This government wants much lower interest rates, and they will do whatever it takes to achieve that. They also need to refinance over $7 trillion in debt. Tax cuts are coming. All of this is equivalent to a large liquidity injection through QE or some other means. Even Barhydt's "basic case" calls for 350,000 dollars per coin, while Ether and SOL are expected to reach peak levels of 16,000 dollars and 1,800 dollars respectively. "Valhalla cycle is approaching," he concluded.