Watch 5 Developments This Week: It Will Affect Bitcoin Price!

With support and resistance levels close, trader and analyst Rekt Capital reiterated BTC’s relative weakness when it comes to reclaiming support levels on a macro scale. Previously, the analyst had identified two moving averages that needed to be reconfirmed as support for Bitcoin to hit its all-time high from November.

Dollar index may not support Bitcoin’s price action

According to experts, Bitcoin’s return to $40,000 may not be supported by the US dollar. Since February 4, the US dollar currency index (DXY) has started to recover, attempting to end the steep downtrend that had characterized the previous week. This poses problems for traditionally risky assets. As of Monday, DXY was trading above the 96 mark. The Fed’s rate hike in March and the geopolitical situation involving Ukraine and Russia remain a source of tension this week. Analyst Lyn Alden said: “There have only been four years in the past century when both stocks and bonds have had a negative year. “It’s obviously too early to tell, but so far both stocks and bonds have had negative returns in 2022,” he said.

Spot price begins to lead futures

Amid the rise and fall of local tops, interesting activity is taking place in the Bitcoin derivatives markets. As noted by Twitter users, including Glassnode principal analyst Checkmate, open interest leverage is disappearing from the futures markets. However, the risk of leveraging or “liquidating” disappears as well. It is stated that investors themselves have chosen to change their strategy. Checkmate reported on Sunday that Bitcoin futures leverage has pulled back significantly this week, with a chart showing that investors are moving to reduce risk. Therefore, he expects spot prices to come to the fore.

Regarding the relationship between spot and futures prices, analyst Byzantine General added that futures have the potential to start trading below rather than above the spot price. He noted that the divergence between the futures basis and the spot is already “pretty significant.” Currently, CME futures were trading as much as $200 below the spot price.

Hashrate hits all-time highs

Over the weekend, hashrate charts, an estimate of the processing power devoted to mining, soared to new all-time highs. While it is impossible to know the exact level of hashrate active on the Bitcoin network, hashrate estimates have shown a clear upward trend since the middle of last year.

The mining difficulty, on the other hand, was at 26.69 trillion as of Monday. However, its next auto-adjustment will take it even higher – for the first time, levels above 27 trillion will be seen. Adjustment will begin in about three days and will represent an increase of about 2.2 percent.

Investors continue to HODL

As the popular Twitter account known as PlanC points out, wallets considered to be owned by long-term buyers are increasing dramatically. Citing Glassnode data, PlanC noted that these assets, defined as wallets with at least two significant buy transactions and zero sell transactions, have now reached their highest level in almost five years. The last days of January look particularly appealing for position seekers as BTC/USD returns to $40,000 after a two-week hiatus.

FOMC minutes to be published

Following the FED meeting held on 25-26 January, the minutes of the FED’s meeting will be published on 16 February at 22.00 Turkish time. As a result of the meeting that took place at the end of January, a slight pullback appeared in the BTC price. Time will tell how the publication of the minutes will affect prices.

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