5 signals not to be ignored about Bitcoin this week

Bitcoin navigates troubled waters, between hopes of a rebound and fears of a pullback. This week, 5 decisive factors could well shape its trajectory

Bitcoin price action has been closely watched in recent times, as the world's largest cryptocurrency navigates a turbulent market landscape. Between hopes of a recovery and fears of a pullback, several key signals are emerging that could decisively shape BTC's trajectory this week. Here are 5 crucial elements to watch.

1. Bitcoin tests a key support around $90,000

After the Bybit hack last Friday, Bitcoin price encountered resistance at $92,000 and pulled back slightly. However, the crucial support around $90,000 remained intact. As the weekend approached, Bitcoin price largely consolidated within a narrow range, awaiting fresh directional cues.

Traders are keeping an eye on the liquidity levels and anticipating a battle between buyers and sellers at key price points. Some traders see a bullish potential towards $94,700, while others expect a return towards $90,000 before a possible recovery.

2. US inflation and the risk of stagflation

One major macroeconomic event that will be closely watched this week is the publication of the PCE index on February 28. The Personal Consumption Expenditures (PCE) index is the Federal Reserve's preferred measure of inflation. Economists polled by Trading Economics expect the PCE index to rise by 0.5% month-over-month in January, following a 0.4% increase in December.

The PCE index is a broad measure of inflation that takes into account both goods and services. It is also adjusted for seasonal changes. A higher-than-expected reading could put pressure on the Federal Reserve to raise interest rates more quickly, which would likely be bearish for Bitcoin and other risky assets.

3. Gold rising sharply despite a strong dollar

Another interesting development in the financial markets this week is the sharp rise in the price of gold. Gold typically benefits from inflation, as it is seen as a store of value. However, the strong dollar this year has put pressure on gold, as a strong dollar makes it more expensive for foreign buyers to purchase gold.

Despite this headwind, gold price continues to break historical records, rallying to its highest level in seven months. Interestingly, gold and the dollar are rising simultaneously, which is a rare phenomenon. Some analysts believe that Bitcoin often follows gold with a lag of three to six months, which could signal a significant rise for BTC in the coming months.

4. A volatility at its lowest, signaling a major movement

Another technical indicator that is closely watched by Bitcoin traders is the realized volatility. The realized weekly volatility of Bitcoin is currently at 28.9, close to its historical lows. Such compression levels have historically preceded significant market movements.

The low interest from buyers and sellers at key price points is creating a tense expectation, suggesting that a violent movement, bullish or bearish, is imminent.الخامس. Decline in on-chain activity and investor sentiment

Finally, some on-chain metrics and measures of investor sentiment are also showing signs of a slowdown in activity. Bitcoin network indicators, such as the number of active addresses and the ETF demand, are both declining.

CryptoQuant compares this trend to previous corrections in the bullish cycle, where on-chain activity typically slows down as the price peaks. The Fear & Greed Index also stagnates in neutral territory this week, highlighting the persistent uncertainty in the market.