Analyzing the Current Bitcoin Landscape: Price Resistance, Upcoming Economic Events, and On-Chain Indicators
Crypto News – Bitcoin’s on-chain indicators suggest a strong upward trend as its price struggles to establish an uptrend, facing formidable resistance around the $40,000 mark. As we enter a new week, Bitcoin hovers near its highest point in a year and a half, leaving traders speculating about its next move.
Last week, Bitcoin price surged past $38,000, but has since been confined within a tight range, keeping both bulls and bears in a state of constant tug-of-war. The central question now is whether Bitcoin will experience a significant pullback or break through the $40,000 barrier, silencing skeptics.
In the coming days, several key events could potentially shape Bitcoin’s trend. Underneath these events, there’s a growing sense that the market is poised for a lift. The upcoming monthly close promises to introduce volatility, but before that, a series of macroeconomic developments could spring unexpected price movements.
Cointelegraph delves into these topics and more in its weekly overview of potential triggers for Bitcoin price volatility.
Bitcoin at a Crossroads as Monthly Close Approaches, Up Less Than 10%
This week’s monthly close is a critical moment for day traders, with Bitcoin at a crucial junction. Unexplored liquidity levels below and the allure of $40,000 above, encircled by resistance, have resulted in a stubbornly fixed daily trading range. Neither bulls nor bears have been able to significantly shift the narrow corridor in which BTC/USD has been trading. Recently, Bitcoin dipped to $37,100 before rebounding, as noted by Cointelegraph Markets Pro and TradingView.
Renowned trader Skew believes it’s time for the bidding momentum to pick up. He observes that spot buyers initially led the recovery, followed by a forced bidding from perpetual traders, mostly involving short positions being closed. As the European and US sessions commence, Skew stresses the importance of monitoring whether spot bids continue.
Skew also points out significant liquidity blocks above and below the current price, with $37,000 and $38,000 as critical levels. He notes the abundant bid liquidity below $37,000, suggesting that if spot sellers persist, it could drive the momentum needed to fill those lower bids.
With the monthly close imminent, Bitcoin’s current month-to-date gain is a modest 7.8%, making November 2023 an average month historically. Data from CoinGlass reveals that November typically features more substantial price movements, both upward and downward. The fourth quarter, so far, has seen gains of nearly 40%.
Federal Reserve Data to Impact Bitcoin
This week promises a classic macroeconomic environment, with potential volatility triggers for Bitcoin traders. The US Federal Reserve is set to receive crucial inflation data in the coming days, which will inform next month’s interest rate policy decisions. Fed Chair Jerome Powell is scheduled to speak on December 1, following remarks from other senior Fed officials throughout the week.
The most anticipated market data releases include the Q3 gross domestic product and the Personal Consumption Expenditures (PCE) index for October, scheduled for November 29 and 30, respectively. Recent US macroeconomic data has shown a faster-than-expected easing of inflation, positively impacting risk assets.
The Kobeissi Letter, a financial commentary resource, anticipates a full trading week ahead with persistent volatility. Current projections from CME Group’s FedWatch Tool indicate a near-certain likelihood of the Fed maintaining current interest rates.
Grayscale Bitcoin Trust (GBTC) Nears Bitcoin Price Parity
As the US awaits regulatory approval for its first spot price Bitcoin ETF, market sentiment is improving, especially evident in the largest Bitcoin institutional investment vehicle, the Grayscale Bitcoin Trust (GBTC). The GBTC share price, once nearly 50% lower than its net asset value (NAV), now stands at just an 8% discount, as per data from November 24.
The fund’s resurgence signals market anticipation of an ETF approval and growing institutional interest in Bitcoin. William Clemente, co-founder of Reflexivity, a crypto research firm, notes the market’s expectation of an imminent ETF approval.
Significant dates for potential ETF approval are set for after the new year. Trading firm QCP Capital suggests that January 3, 2024, could be a timely approval date, coinciding with the 15th anniversary of the Bitcoin genesis block. ARK Invest’s ETF application deadline on January 10 is another key date, with a critical deadline for several other candidates set for March 15, 2024.
Bitcoin Hash Rate Surpasses 500 Exahash Milestone
Ahead of the April 2024 block subsidy halving, Bitcoin miners are deploying unprecedented processing power. The hash rate has reached all-time highs, surpassing 500 exahashes per second. This milestone underscores miners’ confidence in future profitability despite Bitcoin’s price being 50% below its peak.
Simultaneously, miner wallet outflows to exchanges are at their lowest in seven years, according to CryptoQuant. Contributing analyst Caue Oliveira notes that these outflows reflect miners’ market activities, with current average monthly outflows of 90 BTC being the lowest since 2017.
Exchange Bitcoin Balances Resume Downward Trend
After a tumultuous month marked by withdrawal suspensions and legal actions against major crypto exchanges, Bitcoin balances on exchanges are declining again. Glassnode data shows that as of November 26, exchange-held Bitcoin totals 2.332 million BTC, the lowest since April 2018, except for recent October lows.
The situation was further complicated in November due to reactions to Binance’s record $4.3 billion US fine and the suspension of withdrawals by Poloniex and HTX following a hack.
Leave a comment