Key Points
- The Bitcoin price is comfortably above $60,000, sparking anticipation of a new all-time high.
- Despite the bullish sentiment, volatility hurdles and a potential correction period could influence the market trajectory.
Bitcoin (BTC) has started a new week with a strong performance, as the cryptocurrency's price continues to rise in February. The first weekly candle of March closed above $60,000, stoking expectations of a new all-time high.
Bulls Eye All-Time Highs
The bullish scenario is one of the most optimistic outcomes for 2024 and significantly better than what many traders and analysts had predicted. However, numerous volatility hurdles exist between now and the end of the month, and April's block subsidy halving is a critical moment.
The United States Federal Reserve is expected to provide guidance on the economy's state soon. If this does not surprise risk-asset traders, the exchange-traded funds (ETFs) may continue buying BTC. However, the average investor is currently acting out of "extreme greed."
The State of Bitcoin Markets
The state of Bitcoin markets could be at a critical point. Bitcoin started the week with a significant price swing, which included a new multi-year high. The BTC/USD hit $64,282 on Bitstamp, and it is now acting even higher, near $65,000.
Traders and analysts on social media are divided between optimism and disbelief, with calls for a major reversal remaining vocal. Some suggest that BTC/USD may yet form a "cup and handle" pattern at the all-time highs, correcting as low as $40,000 in a severe test for bulls and bears.
In broader terms, crypto investing is still not on the mainstream majority's radar. If this changes, a new wave of viral interest in both Bitcoin and altcoins could fuel an increasingly parabolic market.
Looking at a Potential Correction
Charles Edwards, founder of quantitative Bitcoin and digital asset fund Capriole Investments, delves into the chances of a correction. He argues that the residual fervor from last month may simply be taking longer to fade. He warns that "froth" can remain for 2-3 weeks before a flush, potentially in mid-late March.
Edwards stresses that he is not bearish from a long-term standpoint. As an investor, risk management is necessary, especially with markets at such crucial historical levels.
Bitcoin Market Cap's Counterargument
Accompanying concerns of overheated markets are some of the highest funding rates in history. Open interest, a key precursor to BTC price volatility, tells a story of its own, hitting a giant $27.7 billion on Mar. 4.
Despite this, one analyst noted Bitcoin’s larger market cap last week means that the OI tally has more room to grow.
Upcoming Macro Events
The Fed and, in particular, Chair Jerome Powell, are the highlights of the upcoming macro week in the U.S. Powell will testify before a House committee and Senate panel, giving policymakers an update on the economy. The biannual event is expected to see Powell maintain now-familiar narratives on inflation and interest rates.
Average Crypto Investor Sentiment
For the average crypto investor, the lure of all-time highs is having a familiar effect on sentiment. According to the Crypto Fear & Greed Index, levels of "extreme greed" are at multi-year highs. At 82/100, these are increasingly at levels which have historically marked market turnarounds due to unsustainable trajectory.
