Bitcoin Watchlist: 5 Vital Indicators to Navigate the Market Effectively!

An unexpected turn of events welcomes Bitcoin (BTC) holders, currently trading at $ 66,000.

BTC price chart | Source: Tradingview

After days of amazingly slow progress, Bitcoin finally made a breakthrough to break key levels.

Some suspect that BTC is now on the verge of becoming “parabolic,” which was back on traders’ radar after a week dominated by record highs in altcoins.

Will “Moonvember” live up to its name? Let’s look at what could change the market in the coming days.

place Futures contract

It took a week of patience for the bulls to finally return to the market and recapture April’s all-time high (ATH) of $ 64,900.

It often happens during bull runs that prices rise at breakneck speed and this time the hourly candle has added $ 2,000 to the spot price.

The timing was perfect as it came close to the close of the weekly candle, which allowed the weekly chart to hit a new record high of $ 63,270.

CEO and Founder of the Digital Currency Group, Barry Silbert must also calling out: “A special week”.

Podcast host Scott Melker posted a chart showing Bitcoin’s breakout trend.

https://twitter.com/scottmelker/status/1457512610727931907?ref_src=twsrc%5Etfw” target=”_blank” rel=”nofollow noopener
“Resistance is futile.”

In addition to weekly ATH levels, which is another major milestone for the broader crypto market, the crypto market cap topped $ 3 trillion for the first time.

Bitcoin’s long-term potential remains bullish as analysts believe its massive gains are yet to come this cycle.

“Those who think it’s too late to buy BTC don’t know that it can go much higher this cycle,” said Scott Melker. called Add.

Filbfilb, analyst and co-founder of the Decentrader exchange, says the correction will likely fill the CME futures void, as the market opens significantly higher on Monday than it closed on Friday – as in earlier times in history.

“It looks pretty optimistic, but I think it will pull back to fill the CME void.”

CME Bitcoin Futures 4-hour candlestick chart | Source: TradingView

Funding rate increased

In addition to the CME gap, another signal from the derivatives market could lead to price volatility in the short term.

The data at the time of publication show that funding rates on the stock exchanges are returning to unsustainable levels.

Though not as high as it was during Bitcoin’s run to $ 67,000 in October, high positive funding rates often result in price corrections when traders are satisfied with long positions.

However, for analyst Dylan LeClair, this is nothing to worry about as there are no clear signs of an increase in financial leverage.

“BTC is up $ 2,000 in the past few hours without any significant increase in Open Interest (OI) futures or the funding rate for perpetual contracts.”

“Current price action is the result of exhausted spot market sales, not a sudden increase in leverage. No seller liquidity = spread increases ”.

BTC funding rate chart | Source: Coinglass

Meanwhile, general market sentiment is leaning towards “extreme greed,” as measured by the crypto fear and greed index.

However, at 75/100 the indicator shows that there are at least 20 points left to reach the previous ATH level.

Cryptocurrency Fear and Greed Index | Source: alternative.me

Miners still don’t sell Bitcoin

As the price approaches ATH, Bitcoin miners continue to show firm determination and “hold” not to sell their BTC.

The data from the on-chain analytics service CryptoQuant, which shows outflows from miners’ wallets, has been unchanged over the past few weeks and months.

Miner BTC flow chart | Source: CryptoQuant

There could be a very good reason – since the halving in May 2020, when miners’ earnings in BTC fell 50%, the dollar value of their earnings has skyrocketed.

“Despite the decline in BTC revenues, dollar miners’ revenues have increased 550% since halving in 2020, reaching an ATH of over $ 62 million per day.”

An accompanying chart shows the extent to which miners are using their positions and the profits they have made during the current four-year halving cycle.

Bitcoin Miners Sales vs. Price Chart | Source: Glassnode

As Bitcoinist previously noted, the behavior of miners in the fourth quarter was very different from what it was at the beginning of the year.

The Q1 outflow is significantly higher, although it is trading at relatively much lower levels today.

Hashrate shows “absolute resilience”

The bullish mood among miners is accompanied by a corresponding “Just Up” story for Hashrate.

As a measure of the computing power devoted to maintaining the blockchain, the Bitcoin network’s hashrate continues to recover from the volatility caused by the Chinese ban in May.

In record time, the hashrate has withstood all of China’s impact as miners move to the US and multiple countries, and ongoing operations expand their capabilities.

“The recovery from the Chinese mining ban has shown the absolute resilience, robustness and decentralization of the Bitcoin network,” said LeClair. To write in the comments on Twitter.

The hashrate will vary depending on the estimate used as it cannot be accurately calculated. The seven-day blockchain average at press time is 161 exahashes per second (EH / s) with an ATH of 168 EH / s.

Bitcoin 7-Day Average Hashrate Chart | Source: Blockchain

In addition to the hashrate, the difficulty will only increase after eight consecutive climbs.

Over the next 5 days, at current prices, the difficulty level will increase by about 3% to 22.33 trillion – which even closes at the ATH before the crash due to cracking down on Chinese activity.

CPI data shows inflation is likely to rise

Inflation remains an important factor in macro markets, which continues to make Bitcoin attractive as a hedge against inflation.

With US consumer price index (CPI) data released this week, there are plenty of estimates that suggest the gap between forecast and reality will widen.

The Federal Reserve (Fed) recently signaled that it will ease its asset purchases and may even be forced to change course due to the current environment, an analyst told Bloomberg.

Citigroup investment expert Mahjabeen Zaman said:

“The forecast and actual CPI are likely to rise, and as a result, the Fed could really accelerate the pace of asset purchases.”

As Cointelegraph pointed out, the CPI itself is a poor measure of inflation as it excludes many of the assets that are seeing the biggest increases in value and price.

This has sparked calls to use Bitcoin to maintain the purchasing power of certain individuals and wealthy companies, and was a key factor in MicroStrategy’s move to convert a large portion of its balance sheet to BTC.

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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

Mr. Teacher

According to Cointelegraph

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