Bitcoin (BTC) is starting a new week with traders speculating it will be near its highest level in 18 months. What are the next steps?
BTC price held higher after surging above $38,000 last week, but since then a testing “fine range” has kept bulls and bears locked in battle.
Whether a deeper retracement will come or a trip to $40,000 will leave the contrarians behind is now a key near-term question for market participants.
Over the next few days, there will be a variety of potential catalysts that will help influence the emergence of a trend in Bitcoin, and there are growing signs that the market will move higher underneath.
Volatility will occur later in the month as the month-end closes, but before then a number of macroeconomic events can inject unexpected price action.
Cointelegraph takes a look at these issues and more in our weekly summary of what could drive Bitcoin price volatility in the week ahead.
Monthly close approaches with BTC price rising by less than 10%.
The monthly close forms a key diary date for day traders this week as Bitcoin stands at a crossroads.
As Cointelegraph reports, untested liquidity levels are falling and the upside temptation of $40,000 is surrounded by resistance, creating a bullish daily trading range.
Neither bulls nor bears were able to clear BTC/USD’s increasingly narrow corridor, and even new highs on the daily frame were few and short-lived.
At the latest weekly close, timely bidding began to take place and Bitcoin fell to a low of $37,100 before recovering, data from Cointelegraph Markets Pro and TradingView show.
For popular trader Skew, it’s time for the bidding momentum to return.
“The spot taker led the bounce and eventually the culprit taker became the force bid. “Most short sellers have been taken out of the market,” he wrote. dedicated analysis On X (formerly Twitter)
“Now, as we get into the EU session and the U.S. session, it’s important to see if there are any spot bids.”
Skew also references liquidity blocks both above and below spot prices, with key levels to watch being $37,000 and $38,000.
“With a lot of bid liquidity below $37,000, if spot buyers continue to be net sellers, this could provide the momentum needed to fill the limit bid below,” he wrote about the order book on Binance, the largest global exchange.
“Liquidity requests, also called supply, remain between the $38K – $40K area and the critical zone higher.”
With just a few days left before the monthly close, Bitcoin is currently posting a monthly gain of 7.8%, making November 2023 completely average compared to the past.
Data from monitoring resource CoinGlass shows that November typically sees much stronger BTC price movements, with the potential for both ups and downs.
Meanwhile, the fourth quarter as a whole has seen gains of nearly 40% so far.
Key Fed Inflation Measures Drive Macro Catalysts
As November comes to a close, Bitcoin traders await a classic macro week of volatility.
The US Federal Reserve will receive some key data on inflation in the coming days, which will influence its interest rate policy decisions next month.
Federal Reserve Chairman Jerome Powell is scheduled to speak on December 1, following comments from senior Fed officials throughout the week.
The data releases of most interest to the market will be the third quarter GDP and October personal consumption expenditures (PCE), due out on November 29 and November 30, respectively.
Previously, US macro data showed inflation easing faster than market expectations, leading to a positive revaluation of risk assets.
Key events this week:
1. New home sales data – Monday
2. Consumer Confidence Data – Tuesday
3. Third quarter GDP data – Wednesday
4. PCE Inflation Data – Thursday
5. Federal Reserve Chairman Powell’s speech – Friday
6. A total of 10 Fed speaker events
There are two weeks left until the December Federal Reserve meeting.
— Kobeissi Letter (@KobeissiLetter) November 26, 2023
The Kobeissi Letter, a financial commentary piece, summed up X: “The week is ahead and volatility is here to stay.”
According to data from the CME Group FedWatch tool, the probability that the Fed will hold interest rates at current levels is now almost unanimous at 99.5%.
GBTC eyes BTC price parity.
Bitcoin is still waiting for U.S. regulators to approve the country’s first spot-priced exchange-traded fund (ETF), but markets continue to show a clear shift in sentiment toward the positive.
Nowhere is this more evident than at Grayscale Bitcoin Trust (GBTC), the largest Bitcoin institutional investment vehicle.
GBTC, which is scheduled to be converted into a spot ETF, is quickly approaching parity with its underlying asset pair, BTC/USD.
GBTC shares were down nearly 50% at one point, but were at just an 8% discount to net asset value (NAV) as of November 24, according to CoinGlass data.
The fund’s renaissance formed a key narrative for future successful ETF drives and the emergence of genuine public institutional interest in Bitcoin for the first time.
“I think mkt is expecting this ETF to be approved soon,” said William Clemente, co-founder of cryptocurrency research firm Reflexivity. reacted Check your data over the weekend.
But in terms of watershed moments, all the dates now in focus are after the New Year.
In its latest market update sent to its Telegram channel subscribers, trading firm QCP Capital claimed that January 3, 2024 would be a timely approval date to coincide with the 15th anniversary of the Bitcoin Genesis block.
January 10th is the tentative deadline for ARK Invest’s first spot ETF. “This is because ARK’s final application deadline is included in the first batch of approvals.”
“And if ARK is rejected and the others are postponed again, the real make-or-break deadline is March 15, 2024, where Blackrock and the leading candidates face a final deadline,” he added.
Bitcoin hashrate has passed the 500 Exahash threshold.
Bitcoin miners are deploying record processing power to the network ahead of the block subsidy halving scheduled for April 2024.
The hash rate, an estimated measure of this distribution, has now reached an all-time high, passing 500 exahashes per second (EH/s) for the first time this month.
This performance is not only a psychological landmark, but also highlights miners’ confidence in future profitability, even with BTC price performance still 50% below its peak.
At the same time, outflows from known miner wallets to exchanges are at a seven-year low, according to data from on-chain analytics platform CryptoQuant.
“The flow of movement from Bitcoin miner wallets to exchange wallets ultimately represents the activity of these companies in the public markets,” wrote contributing analyst Caue Oliveira in one of the Quicktake market updates.
“Introducing the coin to exchanges will increase the liquidity of BTC on these platforms, providing additional selling pressure to the market.”
Oliveira pointed out that while miners are always selling some of their holdings, the current monthly average of 90 BTC is the lowest since 2017.
Bitcoin exchange balance resumes downward trend
After a month of turmoil due to withdrawal suspensions and legal action against some large cryptocurrency exchanges, BTC balances are once again trending downward.
Related: Bitcoin to $1 Million After ETF Approval? BTC price predictions are wildly mixed
In line with the broader trend of the past five years, BTC stocks on exchanges are moving lower and lower.
According to the latest data from on-chain analysis company Glassnode, as of November 26, the cumulative holdings of major exchanges reached 2.332 million BTC.
Excluding the recent October lows, this is the lowest amount of BTC available since April 2018. At its peak in March 2020, shortly after the COVID-19 market crash, 33.21 million BTC was recorded.
The situation was complicated in November by traders’ reactions to Binance receiving a record $4.3 billion US fine and Poloniex and HTX completely halting withdrawals after the hack.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.
Source: Cointelegraph.com