Bitcoin Analysis: Trader Sentiment Turns Bearish Above 64K Dollars- What You Need to Know

Crypto News- Bitcoin analysis kicks off a fresh week with bulls setting their sights on all-time highs as February’s BTC price evolution continues.

Following a robust monthly close, the first weekly candle of March comfortably surpassed the $60,000 mark.

With anticipation mounting regarding what lies ahead, sellers seem to acknowledge that there may be little standing in the way of Bitcoin’s journey into price discovery.

This scenario represents one of the most optimistic outcomes for 2024 and surpasses the expectations of many traders and analysts.

However, numerous volatility hurdles persist between now and the end of the month, with April’s block subsidy halving looming as a significant event in its own right.

The action begins almost immediately with the United States Federal Reserve scheduled to provide insights into the state of the economy.

Bitcoin Analysis: Trader Sentiment Turns Bearish Above 64K Dollars- What You Need to Know

If this guidance holds no surprises for risk asset traders, the crypto market already faces plenty to contend with — exchange-traded funds (ETFs) may continue buying BTC, although the average investor now appears to be acting out of “extreme greed.”

Can the market’s trajectory maintain its recent trend, or is a more significant correction and consolidation period on the horizon?

Cointelegraph examines the current state of Bitcoin markets at what could be a pivotal moment for the current BTC price cycle.

Bitcoin Approaches Critical All-Time High Zone

Bitcoin started the week with a bang on March 4, as the weekly close triggered a $2,000 hourly price swing, reaching a new multiyear high. Data from Cointelegraph Markets Pro and TradingView confirms that $64,282 was reached on Bitstamp, with BTC/USD now trading even higher — near $65,000.

Bulls are now barely $5,000 away from new all-time highs, marking year-to-date gains of over 50%, as confirmed by on-chain statistics resource CoinGlass. Across social media, traders and analysts are divided between optimism and disbelief, with calls for a major reversal remaining vocal.

“Interesting timeline to read today. 50% calling for considerably higher, 50% calling for the market to rug. Typically this occurs each week, to be honest, however, this split is noticeably more pronounced than usual,” popular trader Skew wrote in his latest post on X.

Skew referenced consensus for upside continuation around the sensitive all-time high level from 2021. However, Venturefounder, a contributor to on-chain analytics platform CryptoQuant, offered a more cautious outlook.

In his recent analysis, he suggested that BTC/USD may yet form a “cup and handle” pattern at the all-time highs, potentially correcting to as low as $40,000 in a challenging test for both bulls and bears.

Contrasting this opinion is the argument that, in broader terms, crypto investing is still not on the radar of the mainstream majority. Should this change, a new wave of viral interest in both Bitcoin and altcoins could materialize, fueling an increasingly parabolic market.

“Bulls in complete control heading into the weekly close,” analyst Matthew Hyland concluded over the weekend.

Analyst Cautions on Crypto Market “Froth”

Delving into the possibility of a correction is Charles Edwards, founder of quantitative Bitcoin and digital asset fund Capriole Investments. Edwards, who has placed considerable importance on the impact of next month’s halving, adopted a sober mood this week, unconvinced about recent moves.

Even if an immediate turnaround does not occur, he argues, the residual fervor from last month may simply be taking longer to fade.

“Froth can remain for 2-3 weeks before a flush. That means mid-late March potentially,” he warned.

Edwards stressed that he is not bearish from a long-term standpoint. As an investor, risk management is necessary, particularly with markets at such crucial historical levels.

“Price can always go up, it’s just risk management and probabilities. The risk profile here is very different (worse) to when Bitcoin was $16K, for example. Simply something to keep in mind for portfolio management,” he continued.

“Volatility in these zones (both up and down) goes up by orders of magnitude. Look at early 2021 for a comparable to today. I still think this bull market has a LONG way to go.”

Bitcoin Market Cap’s Counterargument to Overheated Derivatives

Accompanying concerns of overheated markets are some of the highest funding rates in history.

According to current CoinGlass data, some platforms are seeing funding rates exceeding 0.1%, while the largest global exchange Binance is at nearly 0.05%. Open interest — a key precursor to BTC price volatility — has hit a whopping $27.7 billion on March 4.

Despite this, one analyst noted that Bitcoin’s larger market cap last week means that the open interest tally has more room to grow.

“Bitcoin open interest in notional value is approaching all-time highs. However, when you divide it by the current market cap, it’s sitting at just 2.25%, a historical average,” summarized James Van Straten, research and data analyst at crypto insights firm CryptoSlate, in part of an X post.

An accompanying chart from on-chain analytics firm Glassnode showed a similar situation on both Bitcoin and the largest altcoin Ether (ETH), which is currently priced at $3,496.

Fed’s Powell Set to Convey “Hawkish Stance” in Testimony

The Fed — and particularly Chair Jerome Powell — is the focus of the upcoming macro week in the United States.

Over two days beginning March 6, Powell will testify before a House committee and Senate panel, providing policymakers with an update on the economy.

The biannual event is expected to see Powell maintain now-familiar narratives on inflation and interest rates.

The latter is especially pertinent to crypto and risk assets, with a long-awaited rate cut likely to boost performance. So far, this has yet to materialize, and recent macro data has led markets to push back the odds to later in the year.

“Powell is expected to maintain a hawkish stance in his semiannual testimony to Congress, signaling to markets that the Fed is in no hurry to cut rates,” summarized a group of Bloomberg analysts this weekend.

“If that leads to tighter financial conditions, it will keep the pressure on the economy and raise the chance of additional lagged impacts from monetary policy.”

While markets see little chance of a further rate hike, the odds of a March cut were almost zero as of March 4, according to data from CME Group’s FedWatch Tool. Despite this, plenty of volatility is expected before the Fed’s decision, due March 20.