{"id":15833,"date":"2022-12-19T10:17:56","date_gmt":"2022-12-19T10:17:56","guid":{"rendered":"https:\/\/nftandcrypto-news.com\/crypto\/wave-lower-for-all-markets-5-things-to-know-in-bitcoin-this-week\/"},"modified":"2022-12-19T10:17:58","modified_gmt":"2022-12-19T10:17:58","slug":"wave-lower-for-all-markets-5-things-to-know-in-bitcoin-this-week","status":"publish","type":"post","link":"https:\/\/nftandcrypto-news.com\/crypto\/wave-lower-for-all-markets-5-things-to-know-in-bitcoin-this-week\/","title":{"rendered":"‘Wave lower’ for all markets? 5 things to know in Bitcoin this week"},"content":{"rendered":"
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Bitcoin (BTC) starts the week before Christmas with a whimper as a tight trading range gives BTC bulls little cheer.<\/p>\n

A weekly close just above $16,700 means BTC\/USD remains without major volatility amid a lack of overall market direction.<\/p>\n

Having seen erratic trading behavior around the latest United States macroeconomic data print, the pair has since returned to an all-too-familiar status quo. What could change it?<\/p>\n

That is the question on every analyst\u2019s lips as markets limp into Christmas with little to offer.<\/p>\n

The reality is tough for the average Bitcoin hodler \u2014 BTC is trading below where it was two years and even five years ago. \u201cFUD\u201d is hardly in short supply thanks to the fallout from FTX and concerns over Binance.<\/p>\n

At the same time, there are signs that miners are recovering, while on-chain indicators are signalling that the time is right for a classic macro price bottom. <\/p>\n

Will Bitcoin disappoint further into the new year, or will bulls get the Santa rally they so desperately need? Cointelegraph takes a look at the factors behind upcoming BTC price action.<\/p>\n

BTC spot price: ‘Capitulation’ or ‘slow grind?’<\/h2>\n

Closing out the week at just under $16,750, Bitcoin escaped without a fresh bout of volatility on Dec. 18. <\/p>\n

Even that which accompanied U.S. inflation data and Federal Reserve commentary was short-lived, and BTC\/USD has since returned to an arguably frustrating status quo.<\/p>\n

Data from Cointelegraph Markets Pro and TradingView proves the point \u2014 since the FTX scandal erupted in early November, Bitcoin has seen hardly any noticeable price movement at all.<\/p>\n

BTC\/USD 1-week candle chart (Bitstamp). Source: TradingView<\/em><\/figcaption><\/figure>\n

For market commentators, the question thus is what it will take for things to take a different turn, up or down.<\/p>\n

Eyeing<\/a> Fibonacci retracement levels on the weekly chart, analytics resource Stockmoney Lizards ventured that BTC\/USD was at \u201ckey support.\u201d<\/p>\n

Should the area around $16,800 begin to disappear, the next one is at around $12,500.<\/p>\n

Another chart from the weekend compared<\/a> what it called \u201cfinal washouts\u201d for Bitcoin during past bear markets. This reinforced the idea that BTC\/USD may be almost done \u201ccopying\u201d previous macro bottoming structures.<\/p>\n

BTC\/USD chart comparison. Source: Stockmoney Lizards\/ Twitter<\/em><\/figcaption><\/figure>\n

Others believe that the worst is yet to come for the current cycle. Among them is popular trader and analyst Crypto Tony, who is among those targeting a low potentially around $10,000.<\/p>\n

\u201cSo in 2023 I am expecting BTC to begin to form a bottoming pattern at the lower boundaries of the range we currently sit in, along with the volume support around $11,000 – $9,000,\u201d he reiterated in a Twitter thread<\/a> this weekend.<\/p>\n

\u201cWhether we capitulate or a slow grind down is to be seen.\u201d<\/p><\/blockquote>\n

He added that the \u201caccumulation stage\u201d following mass capitulation would only come further on in 2023, as Bitcoin gears up for its next block subsidy halving event.<\/p>\n

New U.S. data due as analysis predicts risk asset dive<\/h2>\n

After last week\u2019s drama courtesy of inflation data and the Fed, it is safe to say that the coming week will provide somewhat less pressure for Bitcoiners.<\/p>\n

That said, U.S. third-quarter gross domestic product (GDP) growth is due, and predicted to flip positive after Q2 saw a 0.9% retraction. <\/p>\n

This is significant, as with the Q2 print, the U.S. technically fell into a recession, despite the best efforts of politicians to deny that the financial picture was as dire as the data implied.<\/p>\n

As market investor Ajay Bagga notes, however, an overly strong GDP reversal would give the Fed license to continue aggressive interest rate hikes to tame inflation \u2014 something unwelcome for risk assets across the board, including crypto.<\/p>\n

\u201cUS Atlanta Fed US GDPNow model estimate for real US GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2022 is 3.2 % on December 9, down from 3.4 % on December 6,\u201d he wrote<\/a> in an update last week.<\/p>\n

\u201cVery strong US GDP reading from a mostly accurate estimator. Fed will hike and continue hiking.\u201d<\/p><\/blockquote>\n

Beyond GDP, the personal consumption expenditures price index (PCE) is also due, a measure that the Fed keenly eyes when taking policy changes into account.<\/p>\n

In a market update on Dec. 17, trading firm QCP Capital likewise drew attention to the PCE impact.<\/p>\n

\u201cThanks to the Fed, whatever we’re trading now, we’re just trading inflation (and wage) prints,\u201d it summarized.<\/p>\n

QCP nonetheless had a word of warning for risk asset markets, this coming in the form of a leg down for everyone, crypto included, in the near future.<\/p>\n

\u201cAs we’ve been writing, this Q4 rally has set up the perfect 4th wave, with a final 5th wave lower incoming for all markets – S&P\/Nasdaq, 2yr\/10yr, USD and BTC\/ETH,\u201d it stated.<\/p>\n

NASDAQ 100 futures annotated chart. Source: QCP Capital<\/em><\/figcaption><\/figure>\n

Crypto Tony shared that sentiment, predicting what he called an \u201cimpulse low\u201d across stocks indices before a bounce back.<\/p>\n

\u201cI was looking for a push up to create a double top around 4320, but we failed to get there and dumped prior,\u201d hisanalysis of S&P 500 performance read. <\/p>\n

\u201cSame picture here where I am looking for another impulse low to complete the WXY pattern I am seeing.\u201d<\/p><\/blockquote>\n

S&P 500 annotated chart. Source: Crypto Tony\/ Twitter<\/em><\/figcaption><\/figure>\n

Binance CEO calls ‘FUD’ as foul play claims continue<\/h2>\n

Where FTX began, Binance is now following.<\/p>\n

That is the overriding impression from a sweep of crypto media at the start of the week, with Binance firmly on the radar as it battles what CEO Changpeng Zhao has repeatedly called \u201cFUD\u201d (fear, uncertainty and doubt).<\/p>\n

The world\u2019s largest crypto exchange by volume has encountered a backlash from the media and users alike in recent weeks as its attempts to prove its reserves fails to convince.<\/p>\n

As Cointelegraph reported, among the latest events is Binance\u2019s auditor deleting its complimentary findings about the exchange\u2019s financial promises.<\/p>\n

A report from Reuters that Binance publicly rebuffed\u00a0has meanwhile given way to a slew of further misgivings, among them a blog post claiming suspicious activity between Binance and its U.S. counterpart, Binance.US.<\/p>\n

\u201cThese findings neatly dovetail with the previous reports by Forbes and Reuters indicating that Binance.US was a clever trick designed to fool regulators and customers,\u201d concludes the blog post, from an entity calling itself Dirty Bubble Media. <\/p>\n

\u201cHowever, with the collapse of FTX everyone is taking a closer look at the crypto industry. We doubt that Binance\u2019s regulatory Tai Chi will allow them to evade the long arm of the law for much longer.\u201d<\/p><\/blockquote>\n

Zhao meanwhile continues to give no time to any form of accusations, on Dec. 17 reiterating<\/a> his \u201cFUD\u201d perspective. He subsequently retweeted words from Ryan Selkis, founder of analytics platform Messari, in which he stated that there was a xenophobic element to Binance criticism.<\/p>\n

\u201cA good chunk of Binance FUD is just thinly veiled xenophobia,\u201d Selkis wrote<\/a> over two tweets.<\/p>\n

\u201cI\u2019m all for the stress test on deposits and think it\u2019s bad that such a high percentage of volumes runs through a single exchange. I also don\u2019t love the tone of some of the critiques. Sorry!\u201d<\/p><\/blockquote>\n

Nonetheless, Binance remains one of the top potential BTC price triggers, as Cointelegraph noted last week.<\/p>\n

Miners up the competition<\/h2>\n

After its biggest decrease in nearly 18 months, Bitcoin\u2019s network difficulty is due to start rising again this week.<\/p>\n

According to estimates from BTC.com, the next bi-weekly difficulty readjustment will see an increase of around 3.8%.<\/p>\n

Bitcoin network fundamentals overview (screenshot). Source: BTC.com<\/em><\/figcaption><\/figure>\n

This has implications for miners, who have experienced considerable upheaval in the weeks since FTX’s collapse sent BTC\/USD down by up to 25%.<\/p>\n

With profits squeezed, concerns began to appear that miners were due another major capitulation event, and that they would withdraw from their activities en masse.<\/p>\n

As Cointelegraph recently reported, however, not everyone agrees \u2014 the latest interpretations of the data have led to the conclusion that the majority of acclimatizing has already taken place. <\/p>\n

With difficulty due to rise again, this theory remains a valid observation, as rising difficulty implies steeper competition among miners, rather than a retreat.<\/p>\n

Data from on-chain analytics firm Glassnode additionally shows the 30-day decrease in miners\u2019 BTC holdings retracing as selling cools.<\/p>\n

Bitcoin miners’ 30-day net position change chart. Source: Glassnode<\/em><\/figcaption><\/figure>\n

Analyzing miners\u2019 overall share of the BTC supply, meanwhile, journalist Colin Wu argued that their position was not necessarily significant.<\/p>\n

\u201cIt is estimated that Bitcoin miners currently hold a maximum of 820,000 Bitcoins, a minimum of 120,000 Bitcoins, only 1% to 4% of the Bitcoin circulation, even if listed mining companies sell production in June this year 350%, the impact has also weakened,\u201d Wu\u00a0tweeted<\/a>\u00a0over the weekend.<\/p>\n

\"\"
Bitcoin miners’ estimated BTC holdings chart. Source: Colin Wu\/Twitter<\/em><\/figcaption><\/figure>\n

Sentiment predicted to fall to 2022 lows<\/h2>\n

It is no secret that cold feet is the name of the game when it comes to crypto sentiment this quarter. <\/p>\n

Related:\u00a0Bitcoin still lacks this on-chain signal for BTC bull market \u2014 David Puell<\/em><\/strong><\/p>\n

Thanks to FTX and now Binance, there is a distinct sense of doom hanging over social media, and price action across crypto assets has yet to paint a different picture.<\/p>\n

That said, the Crypto Fear & Greed Index is performing markedly better than expected, still sitting above its lowest \u201cextreme greed\u201d bracket.<\/p>\n

At 29\/100, it could even be said that the Index is somewhat out of touch with the mood. <\/p>\n

For Crypto Tony, however, that will be short lived, with the Index returning to this year\u2019s lows of just 6\/100 in 2023.<\/p>\n

\u201cWhen we are in extreme fear, it is seen as a good buy zone. If we are in extreme greed, it is a sell zone. Basing off human psychology,\u201d part of comments explained.<\/p>\n

\u201cBack in June we hit 6 \u203c\ufe0f I expect us to revisit that next year.\u201d<\/p><\/blockquote>\n

Fear & Greed exited \u201cextreme fear\u201d at the end of November, and has yet to return, hitting a high of 31 on Dec. 15 \u2014 its best performance since Nov. 8.<\/p>\n

Crypto Fear & Greed Index (screenshot). Source: Alternative.me<\/em><\/figcaption><\/figure>\n

The views, thoughts and opinions expressed here are the authors\u2019 alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.\n<\/p>\n<\/div>\n