Bitcoin (BTC) starts a new week on known ground below $ 50,000, but expectations are building for major disruptions.
After a new print over $ 50,000 ended in rejection, BTC / USD traders keep guessing to the last when it comes to short-term price action – including the end of the year.
With only two weeks left, it seems unlikely that the type of blowout peaks that characterized both 2013 and 2017 will repeat themselves, but calculations on the chain point almost unanimously to the upside.
With 90% of the Bitcoin supply now officially extracted, Cointelegraph takes a look at what may be waiting for investors this week.
Same, same, but different?
Sunday was marked by a new push to $ 50,000 and beyond, which ultimately failed to hold, according to data from Cointelegraph Markets Pro and TradingView.
It is a well-known story, and one that came as no surprise to experienced market participants.
«53K has also been my line in the sand. Turn it around and we’re back in business, ”analyst William Clemente repeated.
While Bitcoin remains below an asset below $ 53,000, other opinions were far from concerned about the market’s unexpected sideways character this Q4.
For the popular Twitter account TechDev, Bitcoin still “rhymes” with previous bull cycle years and works similar to Q4 last year – just before BTC / USD began its rise.
About as much reason to be bearish here as it was at the end of 2020 before the first major stage in my opinion. pic.twitter.com/62AptElE2G
– TechDev (@ TechDev_52) December 13, 2021
Elsewhere, PlanB, the creator of the stock-to-flow BTC pricing models, was also optimistic. He uploaded a representation of one of his forecasts and argued that Bitcoin had in fact just been in an extended consolidation phase most of the year.
“Patience is the key,” he said added.
To decrease or not to decrease?
This week’s macro trigger comes in the form of the US Federal Reserve and its next announcement on the state of the asset purchase program.
A meeting of the Federal Open Market Committee can provide valuable insight into the future of quantitative easing (QE) and the speed of “tapered” asset purchases.
In the midst of an inflationary environment and the ongoing risk of coronavirus outbreaks, the Fed is facing an unenviable balance in terms of the credibility of the policy it chooses to adopt.
As the Cointelegraph reported, some view the meeting as much more potentially disruptive to crypto markets than last week’s consumer price index data, which showed the highest US inflation since 1982.
“With no opposition from other Fed officials, despite the uncertainty presented by the emergence of the Omicron variant, next week’s meeting looks set to see the Fed announce an acceleration in QE downsizing, with a $ 30 billion cut for January ( to 60 billion dollars of purchases) and a further reduction of 30 billion dollars in February “, it was stated in a note from the banking giant ING last week.
“This will mean that the Fed will end the program by the beginning of March, leaving the Federal Reserve with $ 8.8 billion of assets on the balance sheet – more than double the level before the January 2020 pandemic!”
Major changes in QE effectively change the availability of “simple” money, in the words of BitMEX former CEO Arthur Hayes, and have contagious effects on risk assets such as Bitcoin.
Analyst Cole Garner: Bitcoin “is ready”
It is no secret that indicators on the chain have remained strong despite the fact that the spot price has fallen almost 40% in relation to all-time highs.
Several polls have now joined, giving analyst Cole Garner a serious belief in the “green days” ahead.
In a series of Twitter posts over the weekend, the famous statistician outlined several of his “go-to” lists, which have now become strikingly bullish.
“I think BTC is ready,” he summed up the outlook for BTC / USD as a result.
“Suddenly all my favorite indicators are in line with long and strong.”
The main signals were that they came from over-the-counter (OTC) trading tables. These units’ BTC balance saw a sudden increase last week, corresponding to buying activity among customers.
Although not always consistent with price increases, OTC remains firmly on Garner’s radar as “powerful alpha.”
“One of the very best leading indicators I’ve ever seen. The more you think about it – the more it makes so much intuitive sense,” he wrote.
“It has gone and turned full bull.”
Another is the combined volume delta (CVD) for Bitcoin whales, this sloping upwards in what Garner said is an infallible bull sign.
CVD is used to determine the relationship between buyers and sellers during market movements, and the data indicate that buyer interest also remains strong at the current level.
“This calculation has evolved to be my go-to indicator during this bull,” he commented.
“It does not lie.”
As always, not everyone was convinced, with answers claiming that the increase in OTC numbers may be just that – a brief deviation in a general downward trend. Others stick to a story that demands that Bitcoin end 2021 with a whimper, and consolidate slowly on its way to a return to the upside next year.
Bitcoin ETFs give up their reserves
Continuing a previous trend, institutional investors show no signs of selling out of BTC as a “risk” asset under current conditions.
In the midst of the OTC suspicions, recent data shows that exchange traded funds (ETFs) are busy accumulating and that demand is there for them to do so.
The Purpose Bitcoin ETF, Canada’s first licensed spot ETF product for Bitcoin, added 4,342 BTC to its reserves in December, an increase of 17.6%.
Now with 28,974 BTC, Purpose shows what many have argued for throughout the year – that Bitcoin exposure to institutional units is a tide that must be addressed sooner or later.
“There is only one ETF,” Lex Moskovski, chief investment officer of Moskovski Capital, commented.
The question of whether the United States denies spot-based Bitcoin ETFs a market remains controversial, meanwhile, as industry representatives and even lawmakers try to pressure regulators to explain their position.
“Can anyone explain … why Fidelity Investments, one of America’s most well-known investment advisers, had to travel to Canada to offer an ETF, or why physically crypto-ETFs are safe and legal in Germany, Brazil, Singapore and elsewhere, but somehow not in the US? ” Brian Brooks, CEO of BitFury, testified in the Senate Committee on Financial Services last week.
“Emotional roller coaster”
It may be that the market simply does not know what to think.
Related: 2 important Bitcoin trading calculations suggest that the BTC price has bottomed out
If the Crypto Fear & Greed index is any guide, changes in Bitcoin’s total price activity in the area at the moment can boost sentiment by just a few thousand dollars up or down.
Fear & Greed has returned to the spotlight in recent weeks thanks to the unexpected nature of the BTC downturn.
Last week, it reached its lowest reading since July – 16/100 or “extreme fear.” It then almost doubled to 28/100 in a single day before reversing back to 16 – and then up to 27 – over the weekend.
During this period, BTC / USD traded within a range of around $ 4000.
“This series has turned my Twitter feed into an emotional roller coaster,” analyst William Clemente joked next to a chart showing sentiment reactions to recent price movements.
TechDev, meanwhile, noticed That sentiment is still lower than at the beginning of the year, as Bitcoin opened at $ 29,000.
The same is true of its relative strength index, a key calculation that highlights overbought and oversold phases of an asset at a particular price point.
This, TechDev added, hides a “big” bullish divergence.