Bitcoin hasn’t died for the 500th time, but market fears can easily convince you, otherwise analysts are predicting a slow return to higher levels.

Bitcoin (BTC) started the week with traders still digesting the effects of the previous wave – a massive drop at one point to $ 41,900.

A modest upswing is currently competing with a formidable resistance, the first at $ 50,000.

With a feeling of déjà vu pervading the markets, analysts have to come to terms with the fact that the end of the fourth quarter of 2021 is likely to lag behind the success they forecast.

There is also concern that another, lower BTC price may have to kick in before a real recovery takes place.

What could happen in the last few weeks of the year? Over the next week, Cointelegraph will be looking at five factors that are on everyone’s radar.

Transition to “bullish” in the first quarter of 2022?

After hitting nearly $ 50,000 this weekend, BTC / USD is now back at around $ 48,000 – still a 16% drop in a week.

Compared to an all-time high of USD 69,000, the maximum overnight loss on Friday is 39% so far – significant, but by no means a record for Bitcoin.

______ ~ 40% RSI 2 W. Breakout Correction
2013 4 1 (confirmed bear)
2017 7 1 (bear confirmed)
2021 6 0 (except March 2020) pic.twitter.com/B1nwFEDwKP

– TechDev (@ TechDev_52) December 5, 2021

With price predictions drying up, attention is now turning to a rebound in 2022.

“What’s worth it is my baseline scenario that we consolidate / adhere to the EOY, creating a mixed negative funding / premium ratio before the first quarter climbs,” predicted William Clemente on Twitter to discuss.

With regard to the sustainability of the price rally, the focus will be on the derivatives markets after their liquidation.

Yesterday’s liquidation cascade is the second largest one-day event of 2021 in #BTC Conditions, ideally only due to the sheer magnitude crash on May 19th. pic.twitter.com/tRKPCJn6J8

– TXMC (@TXMCtrades) December 5, 2021

Friday’s events attempted to push open interest in Bitcoin futures back somewhat to levels last seen in September at prices similar to the bottom of the decline.

New CPI data, new inflationary catastrophe

Macro markets have been through a tough market but this week the fire may be fueling a bit in the form of new consumer price index (CPI) data.

Because in November the US CPI is expected to exceed 6.2% of the previous year’s figure from October.

The economists’ predictions were taken note of by Lyn Alden, financial commentator and founder of Lyn Alden Investment Strategies. She added that residential construction, a lagging indicator that hadn’t surfaced last month, was likely to be a factor in results.

Economists, on average, expect next week CPI for what happened in November to be 6.7% year-over-year (up from 6.2% in the previous month) and 0.7% for the monthly report (a decrease from the Previous month by 0.9%). pic.twitter.com/ljOEZQVDBz

– Lyn Alden (@LynAldenContact) December 5, 2021

Inflation hit the headlines again last week after Federal Reserve chairman Jerome Powell suggested that “temporary” was no longer an appropriate description.

Bitcoin reacted immediately and the bulls will be keeping an eye on the new CPI data in hopes of a similar reaction to October.

Despite recent volatility, cryptocurrencies are arguably the best possible way to protect purchasing power, especially since inflation is actually much higher when factoring in assets that are not in the CPI.

“Everyone has double-digit inflation if they measure it correctly and need Bitcoin more than they realize,” said MicroStrategy CEO Michael Saylor, a well-known CPI critic in Bitcoin circles. warning At the end of last month.

Central bank money printing, particularly the Fed, has recently attracted public criticism from the head of another sovereign state.

“Can you stop printing more money? They will only make things worse, ”said Nayib Bukele, President of El Salvador. answered for Powell’s “interim” speech.

“Really. No wisdom.”

Note the spaces!

Bitcoin faces a “huge” futures gap this week – a gap so large that it may not be closed immediately, but traders shouldn’t forget about it, says Michaël van de Poppe, a close associate at Cointelegraph.

However, with derivatives traders only adding downward pressure over the weekend, futures could be a target for positive momentum.

CME futures closed at $ 53,545- $ 5,000 above the spot price at press time on Friday.

Traditionally, BTC / USD could also rally to “fill” this void, paving the way for at least $ 50,000 rally and support, and possibly even a market cap of $ 1 trillion.

“By the end of today there will be a large CME spread of $ 53.5k,” Van de Poppe forecast Sunday.

“Very often, in 99% of the cases, they close at some point. At least one important level to watch out for in the coming weeks as the Bitcoin market continues to rise. ”

The decline has now closed the previous gap with the decline that appeared at the end of November.

“There was some volatility in the markets over the weekend, but I expect real volatility will emerge as the weekly opens and US futures resumes,” said Van de Poppe. Add.

New echo from March 2020 as sentiment hit 5 month lows

Although only a few months after the price fluctuation in September, the turbulence of last week makes most of the comparisons with the events of March 2020.

At that time, the coronavirus formed the background for the instability for the time being, with BTC / USD selling off significantly by a total of 60% within a week.

This time around the deposit wasn’t that big, leading to descriptions of a “mini” that is back up this month.

$ BTC So far, it looks like a scaled down version of the March 2020 crash. pic.twitter.com/KtBGd4K83d

– Daan Crypto Trades (@DaanCrypto) December 5, 2021

One key difference lies in the composition of the market: 18 months ago traders used leverage and their impact on the market was a much smaller phenomenon.

Danny Scott, CEO of CoinCorner exchange, said, “This Bitcoin decline was NOT sentiment-driven. speak in a series of tweets on Saturday.

“It was driven by players who took advantage of it and got liquidated. The mood is still very optimistic. ”

Scott argues that while the sentiment remains intact, the timing is to lift the mood and hope 2021 will end in a boom rather than bankruptcy. March 2020 saw a slow rebound from lows that only accelerated about eight months later.

Meanwhile, a review of the Crypto Fear & Greed Index underscores the shock of many market participants, with 16/100 meaning both “extreme fear” and the lowest score since July.

Van de Poppe Add About the index.

“Real affection can be compared to a funeral. I love it.”

Actual hash rate at an all time high

What is another aspect of Bitcoin other than a downtrend? Network basics.

Related: Top 5 Cryptocurrencies You Should See This Week: BTC, ETH, MATIC, ALGO, EGLD

Panic among spot traders and headlines in the mainstream press about the apocalypse did not affect Bitcoin’s critical network activity and underpin miners’ long-term view.

Even falling to $ 42,000 won’t be enough to hurt performance, and the hash rate – a measure of network-specific computing power – will remain near its all-time high.

The highest hash rate since April pic.twitter.com/qYw2htrtVl

– Nico (@CryptoNTez) December 4, 2021

Different estimates give different definitions of what actually is the highest bitcoin hash rate ever.

According to the popular resource MiningPoolStats, the hash rate is at an all-time high.

Blockchain’s seven-day average is currently 162 exahashes / s (EH / s), down 18 EH / s from the record before China’s May raid.

Even so, the popular mantra remains that spot price action inevitably follows hash rate trends.

The difficulty keeping Bitcoin balanced regardless of the change in hash rate will now increase by just under 1% over a period of six days. Previously, this metric was expected to decrease during the second term.