Bitcoin price action has yet to impress us in 2022, but it looks like things will start moving faster soon.
Bitcoin starts a new week facing multiple hurdles but strong internal support – can the leading asset break through once again? $50,000?
The correction, now in its third month, is frustrating for many, but the playing field could change soon, a growing number of analysts say.
With inflation on the rise and US lawmakers set to release the results of the Bitcoin mining debate this week, there are plenty of potential pitfalls in store.
However, it’s starting to look like Bitcoin is at the point where it’s capable of delivering a classic surprise when most of the mainstream economy least expects it.
Let’s look at five factors that you should pay attention to when plotting the price movement of BTC in the coming week.
Bitcoin Maintains Key Weekly Closing Level
Bitcoin is clearly not interested in overcoming even local resistance levels at the beginning of the week.
After a range weekend with little unique price action, BTC/USD is making lower lows on the shorter timeframes while avoiding key areas around $44,000.
Bitcoin, however, was able to close out the week at exactly the critical moment that trader and analyst Rekt Capital described as “useful for supporting bullish momentum”:
“A weekly close above $43,100 would be a good sign of confirmation that BTC will continue rising from here,” he wrote on Sunday along with the accompanying price chart.
BTC is now well positioned to enter the ~$43100-$51800 range.”
The subsequent movement of the course led to a decrease in the largest cryptocurrency: $42,337 on Bitstamp on Monday around 13:00 Moscow time.
Congress will discuss the “cleanup” of crypto-mining
This week is “setting the stage” in many ways, as the subject of inflation will again be heavily debated.
Amid a fresh flurry of headlines about how inflation is hitting consumers, demonstrating highest consumer price index (CPI) in 40 years, even the ratings of incumbent President Joe Biden began to drop.
A 7% year-on-year containment of consumer price growth could see the Federal Reserve make at least four key rate hikes in 2022 alone, according to a Goldman Sachs forecast last week. This, in turn, puts more pressure on tired consumers.
The Oversight and Investigations Subcommittee Hearing is scheduled to take place on Thursday titled “Crypto Cleanup: The Energetic Impact of Blockchains.” At them, American lawmakers will discuss the alleged impact of cryptocurrency mining on the environment.
Since a significant portion of Bitcoin’s hash rate currently comes from the US, any hostile policy will matter more. No one will welcome a repeat of the May 2021 Chinese exodus and its domino effect on hash rate and network security.
Meanwhile, the hash rate has returned to all-time highs, fully recovering from last year’s events.
Bitcoin “bonfire filled with gasoline”
Bitcoin’s volatility has hit multi-year lows, encouraging its recognition as a major asset, but many don’t expect it to last.
According to the Bitcoin Volatility Index, which calculates the standard deviation of BTC daily returns over last 30 and 60 days, the leading asset has the least volatility With November 2020 and is 2.63%.
Thus, the current price movements are similar to those before BTC/USD entered into pricing after reaching its all-time high. at $20,000 from 2017.
The drop in volume suggests a period of consolidation that is likely similar to the period of exodus leading up to the move on October 20th. But consider that you still have time to work in this BTC range.
Bitcoin volatility index chart
Although “exciting” price moves have yet to recur after the December drawdown, they are nonetheless now more likely due to the fact that the supply of Bitcoin is becoming more and more unavailable.
“With illiquid supply on ATH, for this cycle, Bitcoin is essentially a bonfire filled with gasoline,” argued market commentator Jochal Miles.
“The slightest breath of demand will set off a roaring flame.”
Meanwhile, whales and retail traders are increasingly withdrawing BTC from exchanges to cold wallets, away from the control of speculators.
Investor interest waned
Amid questions about the lack of retail investors even after a 40% drop in prices, new data show that withThe vector did not actually show much interest in Bitcoin during the coming year.
Watching new objects appearing on the blockchain, Glassnode analyst TXMC Trades revealed how quiet Bitcoin has actually been in terms of retail adoption since January 2021.
A look at the 30-day exponential moving average (EMA) of new objects entering the network shows that the last major spike ended at the beginning of the first quarter of last year.
Since then, despite two new all-time price highs, the number of new companies has fallen and returned to the standard rates usually seen after the peaks of the bull cycle.
“Bitcoin bull/bear markets have a clear activity profile on the network,” TXMC explained on Twitter.
“… In terms of activity, the last bull run ended in January 2021. Since then, the market has been quiet.
Bitcoin chart (30-day EMA)
The data highlights that investors have almost forgotten about Bitcoin, even though it hit new highs not too long ago, while institutional activity remains strong.
Levels of interest from Google users amplify this trend, with “Bitcoin” search rates globally at levels that were previously the norm in December 2020.
Miners, despite being far from a loss at the current price level, are also making less transaction fee revenue than at any time since the end of 2020 – just 1.08%.
Annotated chart of percentage income from Bitcoin miner transaction fees (7-day MA). Source: Blockwise/Twitter
Index of fear and greed shows critical marks
Bitcoin’s New Year’s “extreme fear” continues – and judging by online behavior, it will remain the dominant force in sentiment.
The situation has rarely looked bleaker, according to the Crypto Fear & Greed Index, which measures market sentiment with a set of factors to gauge how traders might perform in a given price bracket.
Since the end of December, the index has shown “extreme fear”, and so far no price action has been able to change this.
Cryptocurrency index of fear and greed
Similarly, data covering the movement of BTC with profit or loss shows timidity among transactions, with little to no speculation.
This behavior is common during price drops and was seen last summer when BTC/USD dropped to bottom around $30,000.
Bitcoin volatility index chart
Posted by Newt Salamander, Analyst Freedman Сlub Crypto News
#Bitcoin #repeat #movement #fourth #quarter