Bitcoin (BTC) begins a new week of analysts looking for a low – but one that may not mean a drop to $ 40,000 or below.
After a nondescript weekend, the Bitcoin bulls are now facing a new week of bearish sentiment across the global economy as risk appetite remains subdued.
Amid the lack of a “Santa rally” for virtually everyone, there seem to be few triggers that will help BTC / USD get high in time for the New Year. At the same time, the on-chain metrics remain strong and the miners refuse to spend any money.
With Christmas almost here, Cointelegraph is taking a look at what to look for this week when assessing where Bitcoin could go.
$ 50,000 seems like a long way off for bitcoin bulls
Bitcoin couldn’t produce no significant moves over the weekend but attention is now focused on potentially volatile “bottoming” for the market.
At $ 46,000, BTC / USD remains firmly anchored in a known range, with the bulls failing to find the momentum for a new attack on the $ 50,000 mark.
Buying occurs primarily from smaller retail investors, but a lower level is likely for experienced market participants.
For the popular trader Pentoshi, these could nonetheless avoid retesting of $ 40,000. In a tweet on Sunday, he highlighted the major exchange Bitfinex and its high volume traders as a likely source of support.
“Finex makes the highs and lows at $ BTC. Do you think this is a similar situation where they will only absorb sales at these key levels. See Sep-Post 40.7k Bottom, ”he wrote, referring to late September market events.
“Look for 42-46k Bottom Imo now.”BTC / USD 1-hour candle chart (Bitstamp). Source: TradingView
Others were more optimistic with their trade colleague Galaxy demand a “green week” led by Altcoins.
With ten days left in the year, a surprising conclusion by 2021 is not to be expected generally excluded when it comes to crypto markets.
The historic cycle metric still bottoming out could still surprise traders as it is almost at its mark lowest “overbought” level ever.
“Will we see the same thing this time with a jump and a rally into the Christmas break? Or will we see more profit-taking at the end of the year? ”Summarized the update.
“Right now $ BTC is at an important decision point level, so it would certainly be advisable to carefully manage your own risk until a clear trend becomes apparent.”Bitcoin Advanced NVT signal (light blue) diagram. Source: LookIntoBitcoin.com
Miners keep hanging around
A cohort of Bitcoin hodlers who are reluctant to sell at current prices are miners whose outflows have hit their lowest level in three months.
According to Data From Glassnode, miners outflows have nearly halved in just over a month, repeating the turnaround in market dynamics since the all-time highs.
A similarly dramatic decline occurred in September, with the spot markets bottoming out two weeks later. This month’s action therefore has a historic precedent.
Bitcoin miner outflows 1-hour chart (7-day moving average). Source: Glassnode / Twitter
Further data shows That untapped supply is about to hit an all-time high, the culmination of a hoard trend by miners that began in 2020.
In other words, the miners are in no hurry to spend their block subsidies once a new block has been successfully mined.
These coins are given to miners as a reward for solving a block, but have never been given out on the chain.
Miners started HODLing significantly more $ BTC since March 2020.
– Glass node (@glassnode) December 20, 2021
Macro Swaps 21 month bull run for volat
macro Volatility is set to continue through 2022, a trend that is unsettling for investors, sources warn this week.
Just like with Bitcoin, an unexpected downtrend means that the fourth quarter of this year could end with a whimper and a whimper deny the market his classic “Santa Rally”.
Blame it on both coronavirus and political unrest in the US, the latter coming in the form of a rejection of President Joe Biden’s contested $ 2 trillion spending package from a senator.
Stocks in Asia fell on the day and sentiment was subdued ahead of the US opening.
“Investors should be prepared that Covid will continue to be a major factor in market development through 2022,” said Robert Schein, Chief Investment Officer at Blanke Schein Wealth Management. told Bloomberg.
“After the bull run that we have experienced over the past 21 months, investors are no longer so used to longer periods of volatility.”
Schein was referring to the comeback that has been seen in global markets since March 2020, when a cross-market crash also brought Bitcoin to a low of $ 3,600.
In the midst of it all is the US dollar Return to strength – a potential new headwind for BTC that traditionally correlates inversely with the greenback.
The US dollar currency index (DXY), which measures the strength of the dollar against a basket of major trading partner currencies, was at 96.6 at the time of writing, after hitting almost 97 late last week.
1-day candlestick chart of the US Dollar Currency Index (DXY). Source: TradingView
GBTC hits biggest discount ever
Bitcoin under $ 50,000 should look like a bargain to major investors, but an industry measure tells a different story.
The Grayscale Bitcoin Trust (GBTC), the largest institutional BTC vehicle, is currently trading at over 20% off, data from on-chain analytics site Coinglass confirmed.
GBTC Price vs. Stocks vs. GBTC Premium Chart. Source: Coinglass
GBTC, which plans to convert to a Bitcoin Spot Price Exchange Traded Fund (ETF) next year, saw major changes in market behavior in the second half of 2021.
As Cointelegraph reportedAfter spending the first part of its life trading at a high premium, the mutual fund is now offering institutional buyers a de facto “bargain basement” from BTC.
At 22.95% on December 18, the discount has never been so high – an odd phenomenon that suggests an even stranger lack of demand for GBTC stocks that some argue.
How can Bitcoin be ready to go fully into a top run when you can currently buy GBTC shares with physical BTC at a 17% discount and no one is interested … ask for a friend?
– TonaldDusk (@tonald_dusk) December 13, 2021
Regulatory uncertainty regarding spot-based ETFs remains a talking point for the US since only futures-based products are the green light This year, the industry continues to advocate the topic and advocates change in 2022.
Last week, the major US exchange Coinbase approved plans to switch from GBTC.
“GBTC shares can trade at premiums or discounts to their net asset value (ie the value of the bitcoins they hold). Such premiums and discounts can be dramatic: GBTC has traded over the counter at a premium to its net asset value of up to 142% and a discount to its net asset value of 21% ”, a dedicated letter to which the Securities and Exchange Commission reads.
“If the proposal is approved by Arca, GBTC will be able to use the ETP mechanic, which will 4 minimize the fluctuations between its share trading prices and the net asset value (‘NAV’) of its Bitcoin holdings, and consequently become US retail investors be able to gain access to the bitcoin market via the well-known ETP structure and at trading prices that are more closely aligned with the spot bitcoin trading prices. “
Spot-based are already working with Huge success across the border in Canada, as well as in Europe and elsewhere.
Cold feet freeze over
Not much may have happened over the weekend when it comes to spot price action, but that’s no comfort for nervous traders.
According to the Crypto Fear and Greed IndexThe mood surrounding crypto is as weak as ever.
The index continues its crossover trend and is back in the “extreme fear” zone on Monday after not even breaking 30/100 in December.
By comparison, at the all-time high of $ 69,000 on November 9th, Fear & Greed measured 84/100 – “extreme greed”.
As a popular trader and analyst, Rekt Capital often does repeated, however, such extreme fear precedes “financial opportunities”.
“This current downtrend channel from BTC reminds me of the downtrend channel that BTC formed in May,” he said added Sunday, based on the post-Chinese mining ban events when BTC / USD reversed 50% and Fear & Greed bottomed at 10/100 multiple times.
After this bottoming out and consolidation, it took only a single month for the index to return to the “extreme greed” zone.
Crypto Fear and Greed Index. Source: Alternative.me