Bitcoin started a new week in a strange place – a week similar to last year.
After what news sources describe as 12 months of “consolidation,” BTC price is currently battling for the $ 40,000 mark – almost exactly where it was in the second week of January 2021.
The ups and downs over the past year have been substantial, but essentially Bitcoin remains in the middle of a now familiar range.
The outlook varies depending on your point of view. Some believe a new all-time high is possible this year, while others demand many months of consolidation.
With crypto sentiment at all-time lows, the article will take a look at what could change the status quo in less time in the coming days.
Bitcoin lost $ 40,000
Bitcoin had a challenging weekend as it was the final day in a series of abrupt falls that broke the USD 40,000 support level. Data from TradingView shows that bears have finally steered the market back towards the $ 30,000 region.
The move has been known for a long time, and forecasts even suggest a similar low as in July – just under 30,000 US dollars.
“If Bitcoin loses the $ 40K range, the fear will only intensify,” says analyst Michaël van de Poppe in response to the latest price action.
For the retailer Rekt Capital, the first support point is at the lower limit of the two Bollinger bands, whereby the spot prices are currently “very close”.
The source: Twitter
Meanwhile, analyst Scott Melker has highlighted the emergence of a growing bullish divergence as people are long BTC at $ 39,800.
Van de Poppe added in the comments:
“People are considering some partial sales right now as they expect the market to keep falling.
Also, most people think that Bitcoin will just go under as the bear argument is the main scenario right now. “
At the time of writing, Bitcoin was back above $ 40,000 as the market tried to find local support.
Bleak outlook for cash
This week’s macro picture is especially complicated for venture capitalists, and Bitcoin and Altcoins are no exception.
However, experts say the future may be different.
The US Federal Reserve (Fed) is expected to start rate hikes in the coming months. This results in investors reducing risk and giving the crypto bulls a headache. In March 2020 “easy money” flowed into the market, but now it is getting much more difficult.
The bearish sentiment was summed up by former BitMEX CEO Arthur Hayes in his latest blog post last week.
“Forget what non-crypto investors believe. Their mentality is to naively believe that the fundamentals of network growth and the users of the entire network will allow cryptocurrency to continue on its upward trend without falling.
To me, this indicates a serious sell-off as the dangerous impact of rate hikes on future cash flows is likely to lead speculators and margin investors to seriously sell or drop their crypto holdings. “
US consumer price index (CPI) data for December is released this week, numbers likely to result in unexpected spikes in inflation.
Not only Hayes is concerned about what the Fed might do with cryptocurrencies this year, as Pentoshi and others are also considering a temporary end to the bull cycle. Analyst Alex Kruger conclude in a series of tweets on the weekend theme:
“And the final question is, can crypto ignore the Fed if it decides to go all out with deflation? I don’t believe that thing. The saying “don’t fight the Fed” goes both ways, up and down. If the Fed is too strict on Houston, we have a problem. “
Still, there are some optimists. 10T Holdings founder and CEO Dan Tapiero says to “ignore” the latest roadmap and focus on the unchanged long-term investment opportunity. grandfather to speak:
“The macro backdrop is the most bullish in 75 years. The booming economy is supported by high negative real interest rates. The Fed will never match interest rates with inflation. Hold long-term stocks and Bitcoin, ETH. Hodl due to short-term volatility. The savings in USD cash will continue to depreciate. “
Here’s a look at the effective Fed Funds rate and inflation rates when the unemployment rate was 3.9% as it is today.
Find the outlier … pic.twitter.com/zU1zRj1uXC
– Charlie Billello (@charliebilello) January 7, 2022
“If unemployment is now 3.9%, consider the Fed’s effective rate and inflation rate.”
RSI hits two-year lows
In the midst of the darkness, not everything points to a prolonged downturn for Bitcoin.
On-chain indicators are bullish and the historical context supports this.
This week, Bitcoin’s Relative Strength Index (RSI) continues to stand out, hitting a two-year low.
#Bitcoin The RSI has only been 2 more times as low in the past 2 years. Looks like a ground nearby and a jump due. Let’s see pic.twitter.com/qhQ1pD8yEl
– Bitcoin archive (@BTC_Archive) January 9, 2022
“The Bitcoin RSI was only 2 more times at this low in the last 2 years. It looks like the ground is almost there and is about to ricochet. Let’s see.”
The RSI is an important metric used to determine whether an asset is “overbought” or “oversold” at a given price point.
The deep drop to $ 42,000 shows that such a level is actually viewed by the market as too extreme and a recovery move is needed to make up for it.
In contrast, last January the RSI was sky high and “overbought” while BTC was trading at the same price.
“The Bitcoin RSI is at a 2-year low on the daily chart. March 2020 and May 2021 are the last batches. People are getting bearish here / want to short ”, Michaël van de Poppe comment.
BTC / USD 1-day candlestick chart and RSI | Source: TradingView
At the same time, it should be remembered that there were similar bullish signs on the monthly RSI chart last week.
Hashrate covers Kazakhstan’s losses
Another bright spot from last week’s Bitcoin fundamentals “corrected”.
After hitting new all-time highs in the past few weeks, Bitcoin’s network hashrate is quite precarious due to the unrest in Kazakhstan affecting internet availability.
Kazakhstan accounts for about 18% of Bitcoin’s hashrate, which has since stabilized, allowing the hashrate to virtually drop back to its previous level of 192 exahashes per second (EH / s) statistical.
There was a time when the hashrate dropped to 171 EH / s, which reminded many people of China’s mining ban last May. This appears to have raised the hashrate high and held the record levels of miner participation.
Network difficulty Bitcoin’s price had still risen slightly over the weekend despite volatility and is now well on its way to doing it again with the next automatic correction in less than 2 weeks.
Bitcoin Hash Rate Chart | Source: MiningPoolStats
comment Regarding the classic mantra “price follows hashrate”, claims on-chain analyst Dylan LeClair “will go up forever”.
Last year, China’s mining ban caused the hash rate to drop by 50% and it took about 6 months to make up for the drops.
“What if…?”
On the other hand, the quantum analyst PlanB thinks it is high time that the Bitcoin trend is reversed.
While its stock-to-flow models are being tested and accompanied by a storm of criticism on social media, PlanB is more optimistic than most when it comes to medium to long-term price promotions. Brothers admit Weekend:
“I know some people have lost faith in this bitcoin bull market. However, we are only halfway through the cycle (2020-2024). And while BTC is experiencing some turbulence at $ 1 trillion, the yellow cluster at S2F60 / 10T (small black dot is gold data for 2009-2021) remains my target. “
Cross asset diagram Stock-to-flow (S2FX) | Source: PlanB
It refers to the stock-to-flow value of bitcoin, gold and other assets in the stock-to-flow (S2FX) cross-asset model. This model predicts an average BTC price of $ 288,000 during the current halving cycle.
However, a simple comparison of Bitcoin in this cycle and the previous two reveals a possible trajectory that is now beginning to turn.
What if… pic.twitter.com/te36HkFAbQ
– PlanB (@ 100 trillion USD) January 9, 2022
Another model, the minimum price model, which predicted $ 135,000 per bitcoin by the end of December 2021, has now been discarded after failing to meet its target for the first time in November.
Join Bitcoin Magazine Telegram to keep track of news and comment on this article: https://t.me/coincunews
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Author
Market
5 Bitcoin Things to Watch Out For This Week
Bitcoin started a new week in a strange place – a week similar to last year.
After what news sources describe as 12 months of “consolidation,” BTC price is currently battling for the $ 40,000 mark – almost exactly where it was in the second week of January 2021.
The ups and downs over the past year have been substantial, but essentially Bitcoin remains in the middle of a now familiar range.
The outlook varies depending on your point of view. Some believe a new all-time high is possible this year, while others demand many months of consolidation.
With crypto sentiment at all-time lows, the article will take a look at what could change the status quo in less time in the coming days.
Bitcoin lost $ 40,000
Bitcoin had a challenging weekend as it was the final day in a series of abrupt falls that broke the USD 40,000 support level. Data from TradingView shows that bears have finally steered the market back towards the $ 30,000 region.
The move has been known for a long time, and forecasts even suggest a similar low as in July – just under 30,000 US dollars.
“If Bitcoin loses the $ 40K range, the fear will only intensify,” says analyst Michaël van de Poppe in response to the latest price action.
For the retailer Rekt Capital, the first support point is at the lower limit of the two Bollinger bands, whereby the spot prices are currently “very close”.
The source: Twitter
Meanwhile, analyst Scott Melker has highlighted the emergence of a growing bullish divergence as people are long BTC at $ 39,800.
Van de Poppe added in the comments:
“People are considering some partial sales right now as they expect the market to keep falling.
Also, most people think that Bitcoin will just go under as the bear argument is the main scenario right now. “
At the time of writing, Bitcoin was back above $ 40,000 as the market tried to find local support.
Bleak outlook for cash
This week’s macro picture is especially complicated for venture capitalists, and Bitcoin and Altcoins are no exception.
However, experts say the future may be different.
The US Federal Reserve (Fed) is expected to start rate hikes in the coming months. This results in investors reducing risk and giving the crypto bulls a headache. In March 2020 “easy money” flowed into the market, but now it is getting much more difficult.
The bearish sentiment was summed up by former BitMEX CEO Arthur Hayes in his latest blog post last week.
“Forget what non-crypto investors believe. Their mentality is to naively believe that the fundamentals of network growth and the users of the entire network will allow cryptocurrency to continue on its upward trend without falling.
To me, this indicates a serious sell-off as the dangerous impact of rate hikes on future cash flows is likely to lead speculators and margin investors to seriously sell or drop their crypto holdings. “
US consumer price index (CPI) data for December is released this week, numbers likely to result in unexpected spikes in inflation.
Not only Hayes is concerned about what the Fed might do with cryptocurrencies this year, as Pentoshi and others are also considering a temporary end to the bull cycle. Analyst Alex Kruger conclude in a series of tweets on the weekend theme:
“And the final question is, can crypto ignore the Fed if it decides to go all out with deflation? I don’t believe that thing. The saying “don’t fight the Fed” goes both ways, up and down. If the Fed is too strict on Houston, we have a problem. “
Still, there are some optimists. 10T Holdings founder and CEO Dan Tapiero says to “ignore” the latest roadmap and focus on the unchanged long-term investment opportunity. grandfather to speak:
“The macro backdrop is the most bullish in 75 years. The booming economy is supported by high negative real interest rates. The Fed will never match interest rates with inflation. Hold long-term stocks and Bitcoin, ETH. Hodl due to short-term volatility. The savings in USD cash will continue to depreciate. “
Here’s a look at the effective Fed Funds rate and inflation rates when the unemployment rate was 3.9% as it is today.
Find the outlier … pic.twitter.com/zU1zRj1uXC
– Charlie Billello (@charliebilello) January 7, 2022
“If unemployment is now 3.9%, consider the Fed’s effective rate and inflation rate.”
RSI hits two-year lows
In the midst of the darkness, not everything points to a prolonged downturn for Bitcoin.
On-chain indicators are bullish and the historical context supports this.
This week, Bitcoin’s Relative Strength Index (RSI) continues to stand out, hitting a two-year low.
#Bitcoin The RSI has only been 2 more times as low in the past 2 years. Looks like a ground nearby and a jump due. Let’s see pic.twitter.com/qhQ1pD8yEl
– Bitcoin archive (@BTC_Archive) January 9, 2022
“The Bitcoin RSI was only 2 more times at this low in the last 2 years. It looks like the ground is almost there and is about to ricochet. Let’s see.”
The RSI is an important metric used to determine whether an asset is “overbought” or “oversold” at a given price point.
The deep drop to $ 42,000 shows that such a level is actually viewed by the market as too extreme and a recovery move is needed to make up for it.
In contrast, last January the RSI was sky high and “overbought” while BTC was trading at the same price.
“The Bitcoin RSI is at a 2-year low on the daily chart. March 2020 and May 2021 are the last batches. People are getting bearish here / want to short ”, Michaël van de Poppe comment.
BTC / USD 1-day candlestick chart and RSI | Source: TradingView
At the same time, it should be remembered that there were similar bullish signs on the monthly RSI chart last week.
Hashrate covers Kazakhstan’s losses
Another bright spot from last week’s Bitcoin fundamentals “corrected”.
After hitting new all-time highs in the past few weeks, Bitcoin’s network hashrate is quite precarious due to the unrest in Kazakhstan affecting internet availability.
Kazakhstan accounts for about 18% of Bitcoin’s hashrate, which has since stabilized, allowing the hashrate to virtually drop back to its previous level of 192 exahashes per second (EH / s) statistical.
There was a time when the hashrate dropped to 171 EH / s, which reminded many people of China’s mining ban last May. This appears to have raised the hashrate high and held the record levels of miner participation.
Network difficulty Bitcoin’s price had still risen slightly over the weekend despite volatility and is now well on its way to doing it again with the next automatic correction in less than 2 weeks.
Bitcoin Hash Rate Chart | Source: MiningPoolStats
comment Regarding the classic mantra “price follows hashrate”, claims on-chain analyst Dylan LeClair “will go up forever”.
Last year, China’s mining ban caused the hash rate to drop by 50% and it took about 6 months to make up for the drops.
“What if…?”
On the other hand, the quantum analyst PlanB thinks it is high time that the Bitcoin trend is reversed.
While its stock-to-flow models are being tested and accompanied by a storm of criticism on social media, PlanB is more optimistic than most when it comes to medium to long-term price promotions. Brothers admit Weekend:
“I know some people have lost faith in this bitcoin bull market. However, we are only halfway through the cycle (2020-2024). And while BTC is experiencing some turbulence at $ 1 trillion, the yellow cluster at S2F60 / 10T (small black dot is gold data for 2009-2021) remains my target. “
Cross asset diagram Stock-to-flow (S2FX) | Source: PlanB
It refers to the stock-to-flow value of bitcoin, gold and other assets in the stock-to-flow (S2FX) cross-asset model. This model predicts an average BTC price of $ 288,000 during the current halving cycle.
However, a simple comparison of Bitcoin in this cycle and the previous two reveals a possible trajectory that is now beginning to turn.
What if… pic.twitter.com/te36HkFAbQ
– PlanB (@ 100 trillion USD) January 9, 2022
Another model, the minimum price model, which predicted $ 135,000 per bitcoin by the end of December 2021, has now been discarded after failing to meet its target for the first time in November.
Join Bitcoin Magazine Telegram to keep track of news and comment on this article: https://t.me/coincunews
Follow the Youtube Channel | Subscribe to telegram channel | Follow Facebook page
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