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Bitcoin [BTC] breaks past $24k after CPI report: A rally in the making?

  • Bitcoin’s price hit the $24,000 price range for the first time in six months.
  • Net position change showed short positions dominating trade.

The initial reactions to 13 February’s release of the Consumer Price Index data on Bitcoin [BTC] were divided. Recent pricing activity, however, suggested it had weathered the storm reasonably with a return to a range seen months ago. So, is this a temporary upswing or the beginning of a new trend?

Read Bitcoin’s [BTC] Price Prediction 2023-24

Upswing into the $24,000

Bitcoin entered the $24,000 price level for the first time since August at the close of trading on 15 February. A daily timeframe analysis of the price movement revealed that it had increased in value by the end of trading by 9.47%. It was trading at about $24,500 as of this writing and had reached $24,800 in the same time, with over a 1% gain already registered.

Source: Trading View

There was a correlation between the price movement and the volume, as seen by a check at the On Balance Volume (OBV). This points to a positive price movement for BTC. A good price move was also indicated by a movement above the long and short Moving Averages (blue and yellow lines).

According to the Relative Strength Index (RSI), the asset was in a strong bull trend. The RSI line was above the neutral region and appeared to be moving toward the overbought territory.

Long vs. short

Despite this surge, most traders continued to take short positions against Bitcoin. Most exchanges were dominated by short holdings, as indicated by the Net Position shift seen on Glassnode. This was a sign that the asset’s price might decline. 

Bitcoin (BTC) Net Position change

Source: Glassnode

Additionally, a glance at Coinglass’s BTC Long/Short Ratio revealed a constant battle between long and short takers across exchanges. But as of this writing, the longs were edging, standing at around 59%, while the shorts were at about 40%.

Bitcoin (BTC) Long/Short Ratio

Source: Coinglass

Whales’ activities increase

On the other hand, whales appear content to continue acquiring Bitcoin while the long and short positions are battling it out. A glance at the Whale transaction metric proved that it has started, as suggested in a post by Santiment, that whale activities might increase.

Whale transactions increased on 15 February, according to the measured metrics of above 100,000 and 1 million. Except for two spikes in January, Bitcoin transactions exceeding 100,000 increased to a level last seen in October. According to the data, transactions of over one million have also increased recently.

Bitcoin (BTC) whale transaction

Source: Santiment

Liquidations if…

Consistent buying by market heavyweights indicates they are comfortable with the market’s direction. If the price of Bitcoin keeps rising, many traders will move to cover their short positions. The move might spark a new wave of buying across the board. CoinMarketCap estimated that the total value of all cryptocurrencies was roughly $1.12 trillion, an increase of over 8% as of this writing.

How much are 1,10,100 BTCs worth today?

Moreover, on 15 February, Alabama Senator Tommy Tuberville announced his intention to reintroduce the Financial Freedom Act. According to the Senator, the Financial Freedom Act overturned a Department of Labor guideline, restricting crypto investments in 401(k) plans.

In addition, the senator claims that this legislation will prevent the DOL from taking legal action against anyone who uses brokerage windows to invest in cryptocurrencies. Although the bill has not been considered on the House floor, it may have generated positive sentiments in the crypto community.

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