Cryptocurrency Markets 01/3 CHK: Bitcoin closes February with green doji, altcoins drop slightly

Cryptocurrency Market

Ending February, Bitcoin closed the month candle at $23,141 with a negligible increase compared to the previous month. The trading volume on the opening day of March was also only at $25 billion.

After January 2023, growing to 39.8%, many investors expect BTC to continue to maintain the recovery momentum in February to confirm a long-term bullish signal, especially, in the past, February usually is a “bullish” period for this asset.

On February 16, BTC hit its highest level since August 2022 at $25,250, but the price of BTC has since formed a sharp correction below $23,000 and finally closed the monthly candle at $23,141 , slightly above the opening mark of $23.125, representing a gain of only 0.03%.

As a result, Bitcoin has formed a green doji candle for February 2023. Not exactly a strong continuation of January’s rally, but at least the asset still closed the month in the green, helping to sustain growth hopes.

Bitcoin shows a bullish market structure on the daily chart. But the top asset is stuck in a trend inside an ascending parallel channel, indicating accumulation.

So far, BTC has struggled to break through the midpoint of the aforementioned parallel channel. But the buy signal from the Momentum Reversal Indicator (MRI) is leaning towards the bulls.

The two most recent times, when this indicator sent out buy signals, BTC has rallied 24% and 16% respectively. So, if history repeats itself, Bitcoin price could start to increase by 7% – 26% to $25,211 and $30,000.

Meanwhile, investors should be aware of the rejection at the midpoint of the ascending parallel channel. A move below the lower trendline of the channel and then toppling $21.265 will invalidate the bullish thesis. This move is likely to send BTC back to $18,747.

In the short-term, the altcoin market is showing slight downside momentum as BTC is mostly flat from last month’s close.

NEM (SEE), Conflux (CFX) and ssv.network (SSV) were the 3 worst performing projects yesterday, when they all lost more than 10% of their value. In it, CFX has also dropped more than 35% on the 7-day timeframe. Other projects in the top 100 such as Optimism (OP), Fantom (FTM), Basic Attention Token (BAT), Neo (NEO), Filecoin (FIL), Lido DAO (LDO), Internet Computer (ICP)… turned down. from 4-6%.

Ethereum (ETH) also closed January in the green at $1,605. Similar to BTC, ETH recorded a monthly close that was not much different from the previous month, when it was up just over 1%.

Macro factors

The US and global stock markets all dropped in Tuesday’s trading session (February 28), under the pressure of persistent inflation and expectations that central banks will maintain interest rate hikes for a long time. than. Oil prices rose nearly 2% on hopes of input from China’s energy demand as the country reopens its economy.

Both US stocks and oil prices fell sharply in February, in which oil prices had a series of 4 consecutive months of decline.

Optimism that lifted global stock prices and global bond yields fell in January waned in February, as the influx of macro data from across economies reflected economic growth and the labor market. The dynamics remained firm despite the interest rate hike campaign, and most ominously, inflation fell more slowly than expected. This means that central banks will have to raise interest rates even higher and keep interest rates high for a longer time to really cool down the economy, thereby controlling inflation. .

The bigger worry for investors right now is not the risk of a global recession, but the possibility that the tightening of monetary policy will last longer, according to analysts.

“The market will have to adjust to the message of the US Federal Reserve (Fed). The Fed’s message is that interest rates need to go higher and stay there for a longer period of time,” Wells Fargo Investment Institute analyst Douglas Beath wrote in a note, noting that the stock market will more volatile in the short term.

At the close, the Dow Jones fell 0.71% to 32,656.7 points. The S&P 500 index fell 0.3% to 3,970.15. The Nasdaq index fell 0.1% to 11,455.54 points.

Survey results released by the Conference Board on Tuesday showed that US consumer confidence continued to decline in February. According to the S&P CoreLogic Case Shiller national home price index, single-family home prices in The US in December fell to its lowest level since the summer of 2020.

On the same day, data from Europe showed that consumer prices in some European countries such as France and Spain accelerated. This information contributed to the Stoxx 600 index of European stocks down 0.3% in the last session of the month. Still, the index rose 1.74% in February, marking the fourth month of gains in five months.

The MSCI All-World Index of world stocks fell 0.2% this session and fell 3% in February, after gaining 7% in January on expectations that central banks are about to end their tightening campaign.

On Wall Street, the Dow Jones was the index that lost the most points in February, down 4.19%. The S&P 500 and Nasdaq fell 2.61% and 1.11%, respectively.

Reflecting rising interest rate expectations, the yield on the two-year US Treasury note at one point hit nearly 5% this February. According to data from Refinitiv, this was the February that the US Treasury bond futures posted its biggest increase since 1981.

In a report on February 28, BofA Global Research suggested that the Fed could raise interest rates to nearly 6%, as consumer demand in the US remains strong and the labor market remains tight, forcing the central bank to pull long war against inflation. In the interest rate futures market, investors are betting mainly on the possibility of the Fed raising interest rates by 0.25 percentage points at the March meeting, while the possibility of a 0.5 percentage point increase is 20%.

Interest rate expectations in Europe also rose. The region’s money markets forecast the European Central Bank’s (ECB) operating interest rate to rise to 3.795% before the end of the year, from 3.77% forecast last week.

In an interview with Reuters, the ECB’s chief economist Philip Lane said that inflationary pressures in the eurozone had begun to soften, but the ECB would not stop raising interest rates until it was fully convinced. that the inflation rate is falling to 2% threshold.

Commenting on the Fed, a Citi report said that “Fed officials are waiting for the rate hikes already to decelerate the economy, but there is a high probability that the maximum effect of that tightening has passed. Already”.

Yields on 10-year US Treasuries rose more than 0.5 percentage points in February, their biggest month since September, closing at 3.932%. The 10-year German bond yield – the reference point of the Eurozone bond market, ended February at 2.639%, the highest since July 2011.

Optimism about oil demand in China overcame concerns about rising interest rates this session, sending oil prices up quite strongly. At the close, the price of Brent oil futures on the London market increased by 1.44 USD/barrel, or 1.8%, to close at 83.89 USD/barrel. WTI oil futures in New York increased by 1.37 USD/barrel, or 1.8%, to close at 77.05 USD/barrel.

According to Price Group analyst Phil Flynn, oil is also bullish on short sellers buying to close as February is over. For the whole month of February, the price of Brent oil fell about 0.7% and the price of WTI fell 2.5%. This is the fourth consecutive month of declines for both oils.

“The Chinese economic recovery will pull demand for basic goods higher. Oil is likely to be the commodity that benefits the most,” wrote a JPMorgan report.

Sources familiar with the matter told Reuters that Urals crude oil exports from Russia’s western ports to China in February increased compared with January thanks to lower freight rates and increased demand. A Reuters survey predicts oil prices will rise above $90 a barrel in the second half of this year, as Chinese demand recovers and Russia’s oil production declines.

Similarly, JPMorgan kept the average oil price of 2023 at $90/barrel.

The Reuters survey also showed that the Organization of the Petroleum Exporting Countries (OPEC) produced 28.97 million bpd of oil in February, up 150,000 bpd from January, but still above 700,000 bpd less. /d compared to September. Meanwhile, US crude oil production fell to 12.1 million bpd in December, the lowest level since August 2022 – according to data from the Energy Information Administration USA (EIA).