The previous trading week began for Bitcoin with another attempt to gain a foothold above the $25k–$25.2k area. The asset ended the week with a retest of the $22.9k support level due to the activation of sellers and the fall in BTC quotes.
Trading activity subsided over the weekend, which allowed buyers to seize the daily initiative and partially win back the weekly fall. As a result, Bitcoin recovered above $23k on Saturday, but failed to continue rising on Sunday.
The asset approaches the new trading week with mixed positions. On the one hand, the bulls managed to restore BTC quotes above $23k, but on the other hand, the fundamental news background indicates the likely start of a corrective movement in stock indices.
Bitcoin and SPX
Bitcoin made a bearish breakdown of the $24k and $23k levels in parallel with the decline of the SPX stock index. The correlation of the two assets falls only on weekends, when stock markets are banally closed for the weekend.
In the first half of the day, the cryptocurrency moves within a narrow range without clear signals for impulse jerks. The situation is changing with the opening of U.S. markets and the influx of investors into the stock market.
Goldman Sachs and most of the leading U.S. banks said that the stock market rally is coming to an end, and the increased interest of individuals indicates an overheated market. At the same time, bank analysts believe that the SPX can reach the bottom at around $3,000–$3,100 with a hard landing of the U.S. economy.
The latest GDP and labor market data give hope that there will be no hard landing. At the same time, markets are raising the likelihood that the Fed will intensify its aggressive policy and raise the rate to 6%. With this development, the risk of recession will increase.
In parallel with the stock market correction that has begun, the U.S. dollar index is feeling better. According to recent estimates, investors are increasingly investing in U.S. Treasury bonds as they have become more profitable than fintech stocks.
Due to this, DXY has acquired a local upward trend, which can develop into a retest or an update of the asset's high. As of February 27, the index reached 105 and continues to move in an upward direction.
BTC/USD analysis
Bitcoin is returning to the fall 2022 situation, when the cryptocurrency and stock indices are declining in the presence of a bullish trend in the U.S. dollar index. Despite increasing external pressure, BTC holds on to key support areas.
The BTC hash rate also increased significantly, reaching a new all-time high of 398.71 EH/s. Historically, an increase in BTC mining difficulty preceded a rally in the cryptocurrency price.
However, as of writing, technical indicators on Bitcoin daily chart do not point to the formation of an upward trend. The Stochastic and the RSI index are moving sideways, which indicates price consolidation.
At the same time, we should not forget that the opening of U.S. markets can radically change the situation. If the downward trend continues, Bitcoin will head for a retest of the $22.9k level, where there is an important support area.
If the cryptocurrency starts intraday growth in parallel with SPX, we should expect an attempt to gain a foothold above the $23.8k key resistance level. The current bullish volume is not enough to break through this level and that is the reason why BTC is consolidating.
Results
The new trading week does not promise an update in BTC price highs. The likely outcome will be a consolidation movement within a wide range of $22.7k–$24k. We should also expect the beginning of a full-fledged correction of the SPX index, which will significantly affect the further movement of Bitcoin.
