There are a number of indicators in favor of being long – 5 things to watch out for about Bitcoin this week
Bitcoin started the week with prices still below $ 50,000 but is expected to prepare for a major disruptive journey.
Having rejected the next upward movement above USD 50,000, traders continued to expect short-term price movements, including the end of the year.
With only two weeks left until 2021, the type of recession peak that is common in both 2013 and 2017 seems unlikely, but all indicators in the chain are bullish.
Now that 90% of the Bitcoin supply is mined, consider what might happen to investors this week.
Will the price go up?
TradingView data shows that the price climbed to $ 50,000 on Sunday but ultimately failed to hold out.
4-Hour BTC / USD Candlestick Chart | Source: TradingView
This story is well known and should not surprise experienced market participants.
Analyst William Clemente repetition:
“$ 53,000 is also my limit. I will return when the price returns to this level. ”The customer review has been automatically translated from German.
While bitcoin capitalization remains below $ 1 trillion and prices below $ 53,000, other opinions are not overly concerned about market sideways this quarter.
As for the popular TechDev Twitter account, Bitcoin is still “in line” with previous bullish years and looks the same as in the fourth quarter of last year – just before BTC started to rally.
In my opinion, there are as many reasons for bearish sentiment here as there was at the end of 2020 before the first big phase. pic.twitter.com/62AptElE2G
– TechDev (@ TechDev_52) December 13, 2021
PlanB, the creator of the BTC pricing model, is also optimistic. He argued that Bitcoin is actually in a consolidation phase that has lasted most of the year.
“Patience is key.”
Stock Dependency Chart and BTC Price | A source: Plan b
Tight monetary policy
The macro trigger this week is the Fed’s subsequent announcement of the status of its economic stimulus package.
The FOMC meeting could provide valuable signals about the future of quantitative easing (QE) and the speed at which asset buying policies will “narrow”.
Amid ongoing inflation and the looming coronavirus outbreak, the Fed faces a balancing act when it comes to policy credibility.
Some predict the meeting is likely to be more disruptive to cryptocurrency markets than last week’s CPI data, with the highest US inflation since 1982. Banking giant ING observed last week:
“There was no objection from other Fed officials, despite the uncertainty caused by the emergence of the Omicron option. At its meeting next week, the Fed will announce an acceleration of quantitative easing, with a $ 30 billion cut in January (to $ 60 billion in securities purchases) and another $ 30 billion in May.
This means the Fed will end the program in early March and leave $ 8.8 billion in assets on its balance sheet – more than double what it was before the January 2020 pandemic.
Fed balance chart | Source: Federal Reserve System.
According to former BitMEX CEO Arthur Hayes, major changes to QE are changing the availability of “common” money and affecting risky assets like Bitcoin.
Cole Garner: Bitcoin is “ready”
It’s no secret that on-chain indicators remain strong despite spot prices dropping nearly 40% below their all-time highs.
There are now more optimistic indicators to inspire analyst Cole Garner’s confidence in the green days ahead.
In series Contributions On Twitter, a popular statistician drew several “graph” charts over the weekend, which have now turned into a clear uptrend.
He summarizes the outlook for BTC:
“I think BTC is ready. All of a sudden, all of my favorite leading indicators are long and strong. ”
It contains the most important signals related to the OTC trading platform. These companies’ BTC balances surged last week in line with customer buying activity.
Although the OTC market is not always associated with higher prices, Garner considers it a “strong alpha.”
“One of the best leading indicators I’ve ever seen. Think more closely and you will see that it makes very intuitive sense. It completely rolled over. ”
Bitcoin OTC Loan | Source: Cole Garner
Another indicator is the total volume delta (CVD) for bitcoin whales. CVD is gaining momentum and Garner believes this is an unmistakable bullish sign.
CVD is used to determine the relationship between buyers and sellers during a market movement. The data shows that buyers are still excited at current levels.
“This metric has become my most important indicator throughout the entire race. This is not a lie. ”
CVD kit | Source: Cole Garner
Not everyone is sure about the indicator related to OTC prices yet. Many say that the rise in OTC prices is just a brief deviation from the overall downward trend. Others confirm that Bitcoin will stop tormenting in 2021, but will gradually return to the bullish path next year.
Bitcoin ETF Increases Reserves
Continuing the previous trend, institutional investors are showing no signs of exiting BTC, as it is a “high risk” asset in the current environment.
Among many OTC skeptics, data shows that bitcoin exchange-traded funds (ETFs) are piling up and necessary.
Appointment Bitcoin ETF, the first licensed spot Bitcoin ETF product in Canada, increased its reserves by 4,342 BTC in December, up 17.6%.
Now that Purpose is 28,974 BTC, it shows what many have argued about for a year: getting to know Bitcoin is only a matter of time.
Bitcoin ETF Shares Assignment | Source: Coinglass
“It’s just ETF,” said Lex Moskovsky, chief investment officer of Moskovski Capital. a comment…
Meanwhile, the US abandonment of the spot Bitcoin ETF remains controversial in the market as industry officials and even lawmakers pressure regulators to explain their position.
BitFury CEO Brian Brooks is due to speak to the Senate Financial Services Committee last week:
Can anyone explain to me why Fidelity Investments, one of America’s most famous investment advisors, had to come to Canada to offer ETFs, or why physically hosted crypto ETFs are safe and legal in Germany, Brazil, Singapore and other countries. but why not in the USA. States? Conditions?”
“Emotional roller coaster ride”
The market is so sensitive right now that even a multi-thousand dollar change in the price of bitcoin can change the mood.
Cryptocurrency Fear and Greed Index | Source: alternate.me
The Fear and Greed Index has taken the spotlight again in recent weeks due to the sharp bear market in BTC.
Last week, it fell to its lowest level since July 16, 100, or “extreme fear.” It then nearly doubled to 28/100 in one day, then turned to 16 and climbed to 27 at the end of the week.
At the time, BTC was in the range of around $ 4,000.
“This reach has turned my Twitter feed into an emotional roller coaster ride,” said analyst William Clemente. For a child…
BTC Price Chart | Source: William Clemente
Meanwhile TechDev notification Sentiment remains lower than at the start of the year when Bitcoin opened at $ 29,000.
The same is with the Relative Strength Index, an important indicator that determines the overbought and oversold phases of an asset at a given price.
TechDev added that the RSI is hiding a “large” bullish divergence.