Bitcoin (BTC) is struggling to gain momentum as February nears its end, with liquidity stacking up on both sides of the spot price. Traders remain on edge as key economic data looms, while market sentiment deteriorates amid falling network activity and volatility compression.
BTC Price Action: A Tight Range with High Stakes
Bitcoin is stuck in a narrow trading range, hovering around $95,838, according to Cointelegraph Markets Pro and TradingView data. Last week’s failed breakout attempt, partly due to the Bybit hack, has left bulls and bears evenly matched in liquidation levels.
Prominent trader CrypNuevo noted that price movements could go either way, identifying $94.7K and $92.5K as key levels. Meanwhile, analyst Roman warned that a touch of the $90K support level seems increasingly likely unless BTC can break above $98.4K.
The liquidations data gave us the best trade last week: a long from $93.3k until $99k.
— CrypNuevo 🔨 (@CrypNuevo) February 23, 2025
Now we can see in the liquidation levels that the liquidations are equal to the downside or upside. Perhaps more to the upside considering price is in a LTF downtrend.
$94.7k & $92.5k are key pic.twitter.com/wTJWVa3n18
On a broader scale, trader Luca highlighted Bitcoin’s bull market support band as a crucial indicator. The area, formed by two moving averages, has held firm since October, but a test of this level is looming amid low funding rates and declining retail investor exposure.
Stagflation Concerns Add to Market Jitters
Macroeconomic factors remain a key influence on Bitcoin’s price action. The upcoming release of the U.S. Personal Consumption Expenditures (PCE) Index on February 28 will be a pivotal moment for risk assets. With rising inflation and weakening labor market data, stagflation fears are growing.
Mosaic Asset noted in its latest newsletter that historical stagflation periods haven’t necessarily resulted in stock market declines. However, the CME Group’s FedWatch Tool suggests that interest rate cuts are unlikely before July, keeping market uncertainty high.
Gold Surges While Bitcoin Stagnates
In contrast to Bitcoin’s sideways movement, gold is setting new all-time highs. The U.S. Dollar Index (DXY) is also attempting a rebound after a multi-week decline. Despite the traditional inverse correlation between gold and the U.S. dollar, both assets are rising together, signaling increasing global economic uncertainty.
Historically, Bitcoin has followed gold’s bull runs with a lag of three to six months, suggesting that BTC could see a major breakout later in 2024.
Bitcoin’s volatility is nearing record lows, with Glassnode reporting that BTC’s 1-week realized volatility has dropped to 23.42%. Such compression has historically preceded major price swings. Options volatility data further suggests that while short-term volatility is low, longer-term expectations remain elevated.
On-chain data shows a persistent decline in active Bitcoin addresses, resembling past market cycle peaks. CryptoQuant analyst Avocado_onchain noted that the accumulation rate of Bitcoin ETFs has slowed, with some outflows observed. The decreasing number of unspent transaction outputs (UTXOs) mirrors trends seen before significant corrections in past bull cycles.
Market sentiment remains fragile, with the Crypto Fear & Greed Index holding at a neutral 49/100. Analysts caution that without a fresh bullish catalyst, BTC may struggle to regain upward momentum.
Also Read: Bitcoin and Ethereum Struggle Amid Market Downturn – Is a Rebound Coming?
Bitcoin’s next move hinges on upcoming macroeconomic data, the strength of the $90K support level, and whether new bullish catalysts emerge. With volatility at historic lows and liquidity positioned for a potential breakout in either direction, traders should brace for significant market moves in the coming weeks.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of CoinBrief.io. Before making any investment decisions, you should always conduct your own research. Coin Brief is not responsible for any financial losses.
