February 2023, The Distributed, Stanko Illiev and Md Ishtiaque Ahmed
The beginning of February 2023 was highly positive for the cryptocurrency market; however, the positive trend has changed this trading week. The optimism of cryptocurrency investors fell after the U.S. Securities and Exchange Commission reported that it would intensify its clampdown on crypto staking.
In the latest of a string of actions brought by the US SEC, the crypto exchange Kraken agreed to pay a fine of $30 million as the U.S. Securities and Exchange Commission concluded that Kraken failed to register its staking program, which exposed investors to risks with minimal protection.
The U.S. Securities and Exchange Commission warned once again that it would continue with efforts to bring crypto operators within the U.S. under the same regulatory framework that will treat cryptocurrencies much like stocks and bonds.
Bitcoin has weakened more than 5% since February 08, falling from $23,451 to a low of $21,467. The current price of Bitcoin stands at $21,863, and traders are waiting to see will the price of the flagship cryptocurrency has enough strength to keep above the $21,000 level in the upcoming days. Crypto analytics firm The Block reported this Friday:
“Bitcoin options markets are signalling that investor sentiment has hit a new low for the year. The seven-day 25% delta skew hit -5.2 on Friday, its lowest since December 28 2022. The 30, 60, 90 and 180-day 25% delta skews were all at or close to at least one-month lows, with all aside from the 180-day having fallen back under zero in recent days. That suggests investors are positioned for further downside in the Bitcoin price in the short term.”
Ethereum (ETH) is also losing its value, but it is not yet clear whether bears will find enough funding to push the price again below the current support level of $1,500.
Technical Analysis of Bitcoin (BTC)
Key Findings: BTC Technical Analysis
- Bitcoin price finds support near $21,500 despite the current bearish momentum.
- A break below $21,500 may push the price to a further downside target, near $20,000.
- The 8 EMA is still above the 21 EMA, suggesting an overall uptrend.
- Stochastics oscillator indicates BTC is under oversold market condition.
- The price must exceed the current resistance at $24,000 to continue with the recent bullish rally.
Bitcoin price suffered over 5% loss last week following the rejection at the resistance near $24,000. The price is currently testing the immediate support at $21,500. A break below this level may overturn the bullish momentum and lead the price to a bearish trend reversal.
Technically, the price has already dropped below the dynamic supports at 8 and 21 EMA, which hints at a further downside movement. In such a case, we may see the price breaking the current support at $21,500 and heading toward psychological support at $20,000.
According to Stochastics, both %K and %D dropped below 20, suggesting an oversold market. It indicates the price still has a chance to rejoin the recent uptrend move. For the bullish outlook, the price must hold above $21,500 to survive the current uptrend. If BTC manages to exceed $24,000, the next upside target will be $25,000.
Technical analysis of Ethereum (ETH)
Key Findings: ETH Technical Analysis
- Ethereum price ranged from $1,696 to $1,492 throughout last week.
- The price already dropped below the 10 SMA, which signals further downside movement.
- ETH may retain the recent bullish momentum if the price can hold above the current support at $1,500.
- A break below $1,500 may push the price near the next support at $1,450.
- Upside targets for Ethereum remain at $1,700 and $1,800.
The price of Ethereum has weakened from $1,696 to $1,492 since February 08, and the current price stands at $1,537. The price has also moved below the 10-day moving average, indicating that this cryptocurrency could fall even more in the upcoming days.
Ethereum might have a hard time holding above the current support level, which stands at $1,500, and a break below this level would indicate that we could see ETH at $1,450 or even below. The upside potential probably remains limited for now; still, if the price of Ethereum jumps above $1,700, the next target could be resistance at $1,800.
