BTC price sets new February high as Bitcoin buyers target faraway $25K

Bitcoin rises into the week’s Wall Street open as China spooks investors, but BTC price analysis reveals what looks like growing support for a major drop.

Bitcoin (BTC) spiked past $43,500 into the Feb. 5 Wall Street open as United States markets reacted to Chinese stock turmoil.

China’s losses spark talk of recession

Data from Cointelegraph Markets Pro and TradingView showed local highs of $43,515 on Bitstamp — a new February BTC price record.

Bitcoin had heated up into the week’s first Asia trading session as China’s CSI 1000 index shed 8% in a single day, prompting authorities to impose further controls on short selling.

Trading resource The Kobeissi Letter queried whether the country might be in recession, noting a “disconnect” between large and small-cap stocks.

“China’s market has officially lost $7 TRILLION in value over the last 3 years,” part of a reaction on X (formerly Twitter) acknowledged.

Even as China has vowed to stabilize its markets, investors are worried.

Many believe that China will focus primarily on large cap stocks.

Hence why there’s a huge disconnect between large and small caps now.

Follow us @KobeissiLetter for real time analysis as this develops.

— The Kobeissi Letter (@KobeissiLetter) February 5, 2024

Bitcoin volatility was also aided by a marked increase in open interest, this amounting to $775 million, per data uploaded to X from J. A. Maartunn, a contributor to on-chain analytics platform CryptoQuant.

Outflows from the Grayscale Bitcoin Trust (GBTC), meanwhile, came out lower than in previous days at around 2,600 BTC, continuing an encouraging downtrend.

Today’s #Bitcoin Sent to out by $GBTC/Grayscale comes out to be ~2.6K $BTC or ~115$M worth.

Another big decrease from the most recent trading day on Friday.

Wanted to wait a bit for the next block to make sure it was indeed just this low amount. It seems like it is indeed just… https://t.co/Ul8pcB6e5B pic.twitter.com/1rOuf78oND

— Daan Crypto Trades (@DaanCrypto) February 5, 2024

$25,000 zone gets fresh liquidity

Analyzing order book composition, Keith Alan, co-founder of trading tool Material Indicators, had a fresh BTC price warning in store.

Related: China stocks crash 8% in hours — 5 things to know in Bitcoin this week

Bitcoin, he showed, still lacked liquidity immediately below the spot price, making a return to $42,000 especially easy.

Zooming out, liquidity was increasing far lower — around $25,000, signalling what Alan described as growing sentiment for a dip.

“That doesn’t mean that price is going right here immediately, or even at all, but it does mean that there is some sentiment for this level now,” he explained in his latest video update.

“Is it true sentiment or are they just positioned here for a potential wick? That remains to be seen, but I will be watching this to see if more liquidity comes into this range because, in my opinion, liquidity equals sentiment.”

GM,

In this #BTC analysis we’ll look at candle charts as well as order book and order flow data in #FireCharts across time frames to give a clear view of where the signs of strength and weakness are in the chart.

So far, BTC has failed to print a full candle above the 50-Day MA… pic.twitter.com/BRzWdZU5yZ

— Keith Alan (@KAProductions) February 5, 2024

Alan added that the ladder of ask liquidity overhead spot, this itself moving lower, suggested that now snap upside to $45,000 or higher was likely in the immediate short term.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.