BTC sentiment “comparable to a funeral”-5 things worth paying attention to in Bitcoin this week


Bitcoin (Bitcoin) Starting a new week, traders are still digesting the impact of the last time-the price fell sharply, reaching $41,900 at one time.

The modest recovery is now facing some strong headwinds, starting with $50,000.

Due to a sense of deja vu pervading the market, analysts are beginning to accept the fact that the explosive peak they expected may not occur at the end of the fourth quarter of 2021.

There are still people worried Another deeper BTC price floor It may be necessary to enter before the real recovery.

What happens in the last few weeks of the year? Cointelegraph looked at five factors that everyone will focus on next week.

Entering the “bullish” first quarter of 2022?

After approaching $50,000 earlier this weekend, BTC/USD is now back to around $48,000-still down 16% in a week.

Compared with the all-time high of $69,000, the biggest overnight loss on Friday so far is 39%-significant, but by no means Bitcoin’s record-breaking.

As price forecasts dry up, people’s attention is now focused on the recovery in 2022.

“In terms of its value, my basic situation is that before the bullish first quarter, we will adjust the integration/range to EOY and develop a mixed negative financing interest rate/premium system,” William Clement predicted on Twitter discuss.

BTC/USD 1-hour candlestick chart (Bitstamp). Source: TradingView

The derivatives market after a series of position liquidation will become a focus of the sustainability of price recovery.

Friday’s event managed to “reset” the number of open positions in Bitcoin futures to the level of September, and its price level was similar to a downtrend.

Bitcoin futures open interest chart. Source: Coinglass

New CPI data, new inflation dilemma

The macro market is already on the cutting edge, but this week may add fuel to the fire in the form of new consumer price index (CPI) data.

Since November, the U.S. CPI reading is expected to exceed October 6.2% YoY fluctuation read.

The economist’s forecast has attracted the attention of financial commentator and founder of Lyn Alden Investment Strategy Lyn Alden. She added that housing, a lagging indicator that did not appear last month, may become a factor in the results.

In the eyes of Federal Reserve Chairman Jerome Powell (Jerome Powell), inflation has once again made headlines last week. mean The “short” is no longer an appropriate description of it.

Bitcoin reacted immediately, and the bulls will pay close attention to the new CPI data, hoping to make a similar knee-jerk reaction starting in October.

Despite recent volatility, cryptocurrency is considered the best solution for purchasing power protection, especially when considering assets not covered by the CPI, inflation is actually much higher.

“If they measure it correctly, everyone will have double-digit inflation and need Bitcoin more than they realize,” MicroStrategy CEO Michael Seller, a famous CPI critic In the Bitcoin circle, warn At the end of last month.

At the same time, the central bank’s printing of money, especially the Federal Reserve, has recently aroused public criticism from another sovereign head of state.

“Can you stop printing more money? You will only make things worse,” El Salvador’s President Nayib Bukele, Responded Powell’s “temporary” speech.

“Really. It doesn’t make sense.”

Pay attention to the interval!

Cointelegraph contributor Michaël van de Poppe stated that Bitcoin is facing a “huge” futures gap this week-so large that it may not close immediately, but traders should not forget this.

Since derivatives traders will only increase downward pressure over the weekend, futures may become targets for positive momentum.

Chicago Mercantile Exchange futures closed at $53,545 on Friday-a full $5,000 higher than the spot price level at the time of writing.

According to tradition, BTC/USD is likely to rise to “fill” this gap, paving the way for the recovery of at least US$50,000 and support the market value of US$1 trillion.

“Later today, there will be a huge gap between CME and $53,500,” Van de Poppe forecast Sunday.

“Many times, like 99% of the time, they will be closed at some point. If the Bitcoin market continues to rebound, at least it will be an important level to watch over the next few weeks.”

The 1-hour candlestick chart of CME Bitcoin futures shows the gap. Source: TradingView

At the same time, the decline successfully narrowed the gap between the previous decline and the decline that occurred at the end of November.

“There are some small volatility in the market on weekends, but I expect the real volatility will start when the weekly market opens and US futures are launched again,” Van de Poppe Add to.

As sentiment hits a 5-month low, a new echo in March 2020

Although the price fluctuations in September are only a few months away, the chaos of last week is most similar to the events of March 2020.

Then, just like now, the coronavirus formed an unstable background, BTC/USD Sell ??off A total of 60% of operations in a week.

This time, the stakes were not so high, leading to a re-run of the “mini” description this month.

One major difference is the composition of the market: 18 months ago, leveraged traders and their impact on the market were a much smaller phenomenon.

“This Bitcoin decline is not driven by emotions,” said Dennis Scott, CEO of CoinCorner, an exchange. Said In a series of tweets on Saturday.

“This is driven by the leverage of gamblers and being cleared. Market sentiment is still very bullish.”

Scott believes that although emotions remain the same, the timing is overturning positive emotions and hopes that 2021 will end with prosperity rather than depression. The slow recovery from a low point in March 2020 only accelerated after about eight months.

have a look Crypto Fear and Greed Index At the same time, it highlights the shock of many market participants. 16/100 is both “extremely fearful” and the lowest score since July.

“Since the May crash, people’s fears have never been so low,” Van de Poppe Add to About the index.

“Literally, this sentiment can be compared to a funeral. I like it.”

Crypto fear and greed index. Source: Alternative.me

Hash rate is actually at a historical high

One aspect of Bitcoin doesn’t look bearish? Network foundation.

related: The 5 most noteworthy cryptocurrencies this week: BTC, ETH, MATIC, ALGO, EGLD

The panic of spot traders and the mainstream news headlines of the end of the world did not weaken Bitcoin’s key network activity, highlighting the long-term prospects of miners.

Even a drop to $42,000 is not enough to affect performance, and the hash rate-a measure of network-specific computing power-is still close to the highest level in history.

Different estimates give different definitions of the highest Bitcoin hash rate ever.

According to popular Pool statistics Resources, the hash rate is at the highest sustained level ever.

Bitcoin hash rate chart. Source: MiningPoolStats

Blockchain The current 7-day average is 162 exahash (EH/s) per second, and at the same time, it is 18 EH/s lower than the record before the Chinese strike in May.

Chart of Bitcoin’s 7-day average hash rate.Source: Blockchain

In any case, the popular mantra is still that spot price trends inevitably follow the trend of hash rate.

No matter how the hash rate changes, the difficulty of keeping Bitcoin in balance will now increase Less than 1% Six days later. Previously, this indicator was planned to decline in the second period.