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06.02.2024 07:41 PM
Investors are again buying BTC: Will the cryptocurrency resume its growth?

For the past seven days, Bitcoin quotes have been within the framework of a local consolidation movement with minimal trading volumes. In such a situation, a "triangle" has begun to form on the daily BTC/USD chart, indicating a high probability of an impulsive breakout in one direction. During this period, the volumes of BTC purchases have significantly increased, once again confirming the key influence of Grayscale on testing the $38.5k support level.

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Despite the growing positivity in the cryptocurrency market, there is no reason to believe that the price of Bitcoin will break out of the "triangle" in an upward direction. Furthermore, the asset has not violated the global structure of the downward trend, so the probability of a downward movement still exists. An essential factor that can directly impact the future movement of Bitcoin's price will be the speeches of Federal Reserve members regarding their vision of monetary policy.

After the regulator's meeting and Fed Chairman Jerome Powell's restrained rhetoric, local pessimism prevailed in the markets, fueled by uncertainty about the start of monetary policy easing. Powell also noted that the U.S. is on an unstable financial path in the long term as the national debt is growing faster than the economy. In light of such statements, investment activity, especially in the crypto market, significantly decreased. This is why investors will be awaiting glimpses of hope in the speeches of other Fed members.

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Investors resume buying BTC

Despite the pessimistic short-term prospects for the crypto market and Bitcoin due to maintaining the key interest rate at a high level, long-term investors are resuming the accumulation of BTC. According to Santiment data, wallets with balances of 1,000–10,000 BTC have actively bought cryptocurrency in the last two weeks. The positive news that BlackRock and Fidelity's Bitcoin exchange-traded funds entered the top 10 largest U.S. ETFs with inflows exceeding $4.8 billion also added to the optimism.

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At the same time, analysts from The Block report that Bitcoin network transaction volumes have reached a high since September 2022, with a result of over $1.21 trillion. This indicates the high popularity of BTC even during correction movements. However, a bit of a setback comes from Genesis, a company undergoing bankruptcy proceedings, which has requested court permission to sell shares in Grayscale trusts, potentially negatively impacting Bitcoin quotes.

BTC/USD Analysis

As of writing, Bitcoin continues to consolidate near the $42.6k level. The primary target for BTC bulls remains breaking the 0.5 Fibonacci level at $43.3k. However, after several unsuccessful attempts, the asset's price has entered a consolidation phase. Relatively low trading volumes, standing at $18 billion as of February 6, hinder the successful realization of this idea. These volumes are also insufficient for Bitcoin bears to continue the downward movement towards $40.5k and below $40k.

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In the last 24 hours, the situation around Bitcoin has not significantly changed. This means that the asset could either move towards forming the second leg of a Gartley pattern or resume a bullish rally, establishing itself above $45k. Although Bitcoin managed to break the structure of the local downward trend, settling above $42k, the upward movement has stalled. This indicates that sellers' positions above $43k remain strong, and there is a significant probability of a resumption of the downward movement.

Conclusion

There have been no significant changes in the structure of Bitcoin's price movement. The asset continues to consolidate near the $42.6k level with minimal price impulses. The main reason for BTC weakness is the ongoing flow of liquidity into the U.S. dollar index, Treasury bonds, and gold amidst geopolitical instability. In this situation, BTC investors are left to await the approaching halving, which significantly increases Bitcoin's chances of reaching a new high.

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