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Bitcoin (Bitcoin) facing multiple hurdles to start the new week, but strong internal support – will the old resistance below $50,000 finally drop?
A correction, now almost in its third month, is frustrating many, but conditions may soon be suitable for fresh charges against opportunistic bears, a growing number of analysts said.
As inflation continues to heat up and U.S. lawmakers open the Bitcoin mining debate this week, there are many potential pitfalls.
Still, when most mainstream economies least expect it, it’s starting to feel like Bitcoin has gotten to the point where it can produce classic surprises.
As Cointelegraph charts BTC price action for the week ahead, it looks at five factors to watch.
Bitcoin Holds Key Weekly Closing Level
At the start of the week, Bitcoin appeared to have no interest in addressing local resistance levels.
After a range-bound move with little unique price action, BTC/USD is making lower lows in the short-term while avoiding the key area around $44,000.
With Wall Street closed for a holiday, more of the same is likely on Monday before the market provides direction.
However, Bitcoin did manage to close at a pivotal point identified by traders and analysts Rekt Capital that helped fuel the bullish momentum.
“A weekly close above $43,100 (black) would be a good sign to confirm BTC continues higher from here,” he said. wrote Sunday and the accompanying price chart.
“By turning black into weekly support, $BTC will confirm a re-entry into its ~$43,100-$51,800 range.”
The ensuing drop sent the largest cryptocurrency lower, at $42,337 on the local market on Bitstamp on Monday at the time of writing.
Equally cautiously optimistic is popular trader Crypto Ed, who is eyeing a potential repeat of last week’s move above $44,000 before the bear market was called off.
“While it’s early, this looks like the start of a continuation of last week’s action. Pray!” he concluded his latest segment Twitter update.
Meanwhile, last week, Cointelegraph report Emotions that tend to break up as the end result of the current ranging behavior.
Congress discusses ‘cleaning up’ cryptocurrency mining
This week, “the stage is being set in a number of ways” as the topic of inflation again haunts U.S. markets and politics.
Amid new headlines about how inflation is hitting consumers, Highest 40 years of consumer price index (CPI) prints have reached the approval ratings of President Joe Biden.
Controlling 7% year-on-year CPI growth could see Fed implement no fewer than four key rate hikes in 2022 alone, Goldman Sachs forecast last week. This, in turn, puts more pressure on tired consumers.
“The stage will be set up in the coming weeks,” Pentoshi debate.
Closer to home, this week U.S. lawmakers will discuss the so-called environmental impact of cryptocurrency mining.
bring one chunks In the Bitcoin hash rate now coming from the US, any hostile policy is more important than most in terms of sentiment. A repeat of the Chinese exodus from May 2021 — and its knock-on effects on hash rate and cybersecurity — will not be welcomed by anyone.
Hash rate, like Cointelegraph famous, is now back at an all-time high, fully recovering from last year’s events.
Oversight and Investigations Subcommittee hearing Scheduled for Thursday, it’s titled “Cleaning Up Cryptocurrencies: The Energy Impact of Blockchain.”
The hearing will be streamed live on the day.
Bitcoin’s “bonfire covered in gasoline”
Bitcoin’s volatility is hitting multi-year lows — encouraging its acceptance as a mainstream asset, but not for as long as many expected.
according to Bitcoin Volatility Index, which calculates the standard deviation of daily BTC returns over the past 30 and 60 days, Bitcoin’s volatility is the lowest since November 2020 at 2.63%.
As such, the current price action is similar to before BTC/USD entered price discovery after breaking above all-time highs of $20,000 from 2017.
For trader, entrepreneur and investor Bob Loukas, the preparations are now for a potential repeat of these events.
“Keep in mind when everyone is loading BTC options for the super cycle in September/October. These are probably down more than 80%,” he said Comment, noting that derivatives traders ahead of the current all-time high of $69,000 may be disappointed.
“The drop in volume illustrates a period of consolidation, possibly an outcome period similar to the Oct. 20 move. But still think it’s time to do research in this BTC range.”
While the “exciting” price action after December’s drop has yet to resurface, it is now more likely as Bitcoin’s supply has become increasingly difficult to obtain.
According to market commentator Johal Miles, “Bitcoin is essentially a bonfire covered in gasoline due to the lack of ATH supply this cycle.”
“The slightest need brings a roaring fire.”
as Cointelegraph report, BTC is being brought into cold storage from the control of speculators.
In early 2021, interest “has been quiet since then”
Even after a 40% price drop with no retail investor issues, new data shows that the industry has actually had no interest in Bitcoin for an entire year.
Glassnode analyst TXMC Trades looks at new entities emerging on the blockchain show How quiet has Bitcoin really been in terms of retail adoption since January 2021.
A look at the 30-day exponential moving average (EMA) of the new entity on-chain shows that the last major surge ended at the start of the first quarter of last year.
Since then, despite the all-time high prices, the number of new entities has declined and returned to the standard rates typically seen after the peak of a bull cycle.
“Bitcoin bull/bear markets have a unique profile of on-chain activity,” TXMC explained on Twitter.
“…In terms of activity, the last bull run ended in January 2021. It’s been quiet since then.”
These data underscore that Bitcoin is all but forgotten by ordinary investors, even as it hits new highs and institutional activity remains strong.
The interest level of Google users has increased this trend, search rate Before December 2020, the levels of “Bitcoin” around the world were normal.
Miners, while far from underwater at current price levels, also receive less revenue from transaction fees than at any time since late 2020 — just 1.08%.
“It’s an indicator that retail hasn’t come in yet…although the price is really similar to what it was in early 2021?” Twitter-based on-chain analyst Blockwise Inquire This weekend, more Glassnode data will be presented.
afraid, “extremely” afraid
Bitcoin New Year’s ‘Extreme Fear’ continue – If on-chain behavior is acceptable, it will still be the dominant emotional force.
related: Top 5 cryptocurrencies to watch this week: BTC, NEAR, ATOM, FTM, FTT
according to Crypto Fear and Greed Index, which measures market sentiment through a basket of factors to gauge how traders are behaving at a given price point, but things rarely look more bleak.
Since late December, the index has described the status quo as “extreme fear” and so far, no price movement has been able to change the status quo.
This week, too, the ratio of fear to greed is 21/100 – well within the “extreme fear” range.
Likewise, profit or loss figures involving BTC show timidity among traders, with little visible profiteering.
This behavior is common during price declines, as it happened last summer when BTC/USD fell and bottomed around $30,000.
“This is the real fear and greed index”, popular Twitter account On-Chain College Comment, upload data, the data comes from the realized profit-loss ratio indicator of Glassnode.
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