Bitcoin falls below $ 46,000 – 5 things to see this week
Bitcoin starts the week with analysts looking for a low but may not drop to $ 40,000 or below.
Bitcoin bulls around the world continue to face bearish sentiment after a lackluster weekend as risk demand remains subdued.
In the absence of a “Santa Claus rally,” there are few triggers to help BTC bounce back higher towards the New Year. At the same time, the on-chain indicators are stable and the miners refuse to spend any money.
With Christmas just around the corner, here’s what to look out for this week to gauge where Bitcoin could be going.
BTC 4-Hour Candlestick Chart | Source: TradingView
$ 50,000 seems like a long way off for bitcoin bulls
Bitcoin didn’t make any significant moves over the weekend, but for now the focus is on a potentially volatile “bottom”.
Just under $ 46,000, BTC remains rooted in a familiar realm and cops find no impetus for a new attack on the $ 50,000 mark.
Private investors in particular are still buying, but a deeper low cannot be ruled out for experienced market participants.
However, for popular trader Pentoshi, retesting $ 40,000 can still be avoided. In a tweet on Sunday, he highlighted the major exchange Bitfinex and its high volume traders as a potential source of support.
Think we see the same thing. Finex turns on the top and bottom $ BTC
Do you think this is a similar situation where they will only absorb sales at these key levels.
See Sep-Post 40.7k below
– Pentoshi DM’S ARE SCAM (@ Pentosh1) December 19, 2021
“Finex makes BTC tops and bottoms. Do you think this is a similar situation where they absorb the sales volume at these key levels. Watch the September low of $ 40,700 and look now for a low of $ 42,000 to $ 46,000. “
Others are more optimistic, including fellow dealer Galaxy suspect a “green week” led by altcoins.
There are only 10 days left until the end of 2021, but an unexpected end in the crypto market cannot be ruled out.
In Update In the newest market, the Decentrader trading platform is pointing to Bitcoin’s Advanced NVT indicator as a stepping stone to higher prices.
The historic cyclical index has still bottomed and can still surprise traders as it has “overbought” near its all-time low.
“Are we going to see the same thing this time with a big jump and a rally over the Christmas break? Or will the end of the year bring more profits?
BTC is currently at a critical decision-making level, so it would certainly be advisable to carefully manage the risk until a clear trend emerges. ”
Bitcoin Advanced NVT signal diagram (light blue) | Source: LookIntoBitcoin.com
Miners hodl on
One group of Bitcoin holders who are not in the mood to sell at current levels are miners, whose outflows hit a 3 month low.
Follow Data from Glassnode, miners’ outflows have nearly halved in just over a month, just as market dynamics have changed since the all-time highs.
Outflows similarly decreased in September, with the spot market bottoming out two weeks later. Hence, this month’s action has a precedent.
1 Hour Bitcoin Miner Flow Chart (7 Day Moving Average) | Source: Glassnode
Other data show that the unused supply will reach an all-time high. The peak of the Miner Hodl trend begins in 2020.
In other words, miners are in no hurry to hand out rewards when a new block has been successfully mined.
Macro market continues to fluctuate
This week, many sources warned that macro volatility will continue through 2022, a trend that is making investors nervous.
As with Bitcoin, a sudden slump that would signal the fourth quarter of this year could end painfully and undo the “Santa Claus rally”.
The first cause is the corona virus and the political instability of the USA. The second reason was that a senator rejected President Joe Biden’s $ 2 trillion spending package.
Asian stocks fell on the day and before the US opening, keeping investor caution.
Robert Schein Investment Director at Blanke Schein Wealth Management to speak with Bloomberg:
“Investors should be prepared for this as Covid will continue to be an important factor in market performance in 2022. After the bull run we have seen in the past 21 months, investors with periods of prolonged volatility are feeling alienated.”
Schein is referring to a comeback in global markets since March 2020 when a crash between markets pushed Bitcoin as low as $ 3,600.
In the midst of it all, the US dollar is making a strong comeback – a new negative for BTC as the leading cryptocurrency has traditionally been negatively correlated with the greenback.
The US dollar currency index (DXY – a measure of the strength of the US dollar against the currencies of its major trading partners) was 96.6 at press time and hit nearly 97 at the end of last week.
DXY. Diagram 1 day | Source: TradingView
GBTC hits its biggest discount ever
Bitcoin under $ 50,000 is said to be a bargain for large investors, but an industry metric tells a different story.
Grayscale Bitcoin Trust (GBTC), the largest institutional BTC investment vehicle, is currently trading at a discount of 20% Data from the on-chain analytics site Coinglass.
GBTC Price, Stocks and Spread Chart of GBTC | Source: Coinglass
Over the course of the next year, GBTC plans to convert to a spot bitcoin exchange traded fund (ETF) after market behavior changed dramatically in the second half of 2021.
GBTC traded with expensive spreads in its early days, but now offers institutional buyers BTC at a “very affordable” price.
At 22.95% on December 18, the discount has never been so high – a phenomenon many attribute to the lack of demand for GBTC shares.
The regulatory uncertainty for spot ETFs remains a highlight in the US, as only futures-based products get the green light this year. The industry continues to debate the issue and discuss the possibility of a change in 2022.
Last week, the major US exchange Coinbase confirmed GBTC’s switchover plan.
Letters sent to the Securities and Exchange Commission, which states:
“GBTC shares can trade at a premium or discount to their net asset value (ie the value of the bitcoins held by the fund). Such spreads and haircuts can be dramatic: GBTC trades OTC with spreads to net asset value of up to 142% and haircuts of 21%.
If Arca’s proposal is approved, GBTC can use an ETP mechanism to minimize the difference between the market price and the net asset value (NAV) of its bitcoin holdings. As a result, US retail investors can gain access to the Bitcoin market through a familiar ETP structure and at a transaction price closer to the spot Bitcoin trading price. ”
On the other hand, spot ETFs are thriving in both Canada and Europe and elsewhere.
Weekends may not be busy when it comes to spot price action, but this is no consolation for nervous traders.
Sentiment remains weaker than ever, according to the Crypto Fear & Greed Index.
The index continues its intertwined trend, moving back into the “extreme fear” zone since Monday and not even cracking 30/100 by December.
For comparison, at an all-time high of $ 69,000 on September 11, sentiment was 84/100 – “extreme greed”.
As a famous trader and analyst, Rekt Capital often does repeat, such extreme fear “happens before the financial opportunity”.
“The current downtrend channel reminds me of the downtrend channel formed in May,” he added on Sunday, referring to the events following China’s mining ban. At that time, BTC fell 50%, the indicator of fear and greed hit its bottom several times at 10/100.
After this bottoming out and consolidation structure, it took only a month for the indicator to return to the “extreme greed” zone.
Crypto Fear and Greed Index | Source: alternative.me
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