‘Wave lower’ for all markets? 5 things to know in Bitcoin this week

Bitcoin (Bitcoin) begins with a whine as the narrow trading range gives little cheer to the BTC bulls in the week before Christmas.

A week close of just above $16,700 means BTC/USD remains without significant volatility amid a lack of overall market direction.

After seeing volatile trading behavior around the latest US macroeconomic data print, the pair are back in an all-too-familiar status quo. what can change that?

This is the question on every analyst’s lips as the market steps into Christmas and has little to offer.

Reality is harsh for the average Bitcoin hodler. BTC is below where he was two years ago and even where he was five years ago. “FUD” is hardly in short supply thanks to the influence from FTX and concerns over Binance.

At the same time, there are signs. miners are recoveringon-chain indicators show that it is time for a classic macro price bottom.

Will Bitcoin disappoint more in the new year, or will the bulls get the Santa rally they desperately need? Cointelegraph examines the factors behind BTC price action ahead.

BTC Spot Price: “Surrender” or “Slow Grind”?

Bitcoin, which closed the week just under $16,750, escaped without another bout of volatility on Dec 18.

Even with US inflation data and Fed comments short-lived, BTC/USD is arguably back in a frustrating status quo.

data from Cointelegraph Market Pro When TradingView Since the FTX scandal erupted in early November, Bitcoin has seen little or no noticeable price volatility.

BTC/USD 1-week candlestick chart (Bitstamp).Source: Trading View

So the question for market commentators is what does it take for things to go up or down?

Eyeing Fibonacci retracement levels on the weekly chart, analytical resource Stockmoney Lizards ventured to say that BTC/USD is at “significant support”.

Once the area around $16,800 starts to disappear, the next is around $12,500.

another chart for the weekend compared Bitcoin’s “final washout” of past bear markets. This reinforced the idea that BTC/USD may have nearly finished “copying” previous macro bottoming structures.

BTC/USD chart comparison. Source: Stockmoney Lizards/ Twitter

Others believe the worst is yet to come in the current cycle. Among them is the popular trader and analyst Crypto Tony. Potentially around $10,000.

“Therefore, in 2023, we expect BTC to start forming a bottoming pattern at the lower end of the range where it is currently sitting, with volume support around $11,000 to $9,000,” he reiterated. twitter thread this weekend.

“It will be interesting to see if we surrender or slowly crumble.”

He added that the “accumulation phase” following mass surrenders will progress further in 2023 as Bitcoin gears up for the next block subsidy halving event.

New U.S. data due as analysis predicts fall in risky assets

after last week Drama Thanks to inflation data and the Federal Reserve, it’s safe to say that the pressure on Bitcoiners will ease somewhat next week.

Nonetheless, third-quarter gross domestic product (GDP) growth in the US is on track, and is projected to turn positive after the second quarter saw a 0.9% contraction.

This is important, and as with the Q2 print, the US is technically fell into recessionDespite politicians doing their best to deny that the financial situation is as dire as the data suggests.

But as market investor Ajay Baga points out, if the GDP reversal is too strong, the Fed can continue to aggressively raise rates to keep inflation in check. This is unwelcome for overall risky assets, including cryptocurrencies.

“The Atlanta Fed’s U.S. GDPNow model estimate for real U.S. GDP growth (seasonally adjusted annualized) in the fourth quarter of 2022 was 3.2% on Dec. 9, down from 3.4% on Dec. 6. I have.” I have written Last week’s update.

“Very strong US GDP reading with mostly accurate estimator. Federal Reserve hikes rates and will continue to do so.”

Beyond GDP, a Price Index of Personal Consumption Expenditures (PCE) is also on the horizon, a metric the Fed will be looking at when considering policy changes.

and market update On December 17, trading house QCP Capital similarly turned its attention to the impact of PCE.

“Because of the Fed, whatever we’re trading now is just trading inflation (and wage) prints,” he summarized.

Nonetheless, QCP has issued a warning to the risk asset market that this will come in the form of a drag on everyone, including cryptocurrencies, in the near future.

“As we write, this 4th quarter rally has set a full 4th wave, with the final 5th wave being the S&P/Nasdaq, 2yr/10yr, USD, BTC/ETH are down in all markets,” it said.

NASDAQ 100 futures annotated chart.Source: QCP Capital

Crypto Tony shared that sentiment, predicting what it called an “impulse low” across stock indices before rebounding.

An analysis of the S&P 500’s performance states, “We were looking for a pushup to create a double top around 4320, but it failed to get there and was jettisoned earlier.

“It’s the same picture I’m looking for another impulse row to complete the WXY pattern I’m seeing.”

S&P 500 annotated chart. Source: Crypto Tony/ Twitter

Binance CEO calls it ‘FUD’ as cheating allegations persist

Where FTX started, Binance has followed.

This is the most important impression from the crypto media that was wiped out earlier in the week, with Binance battling what CEO Changpeng Zhao has firmly in the spotlight. called repeatedly “FUD” (Fear, Uncertainty, Doubt).

The world’s largest cryptocurrency exchange by volume has faced backlash from media and users in recent weeks as attempts to prove its reserves have been unconvincing.

as Cointelegraph reportin one of the latest events, Binance auditors removed complementary findings regarding the exchange’s financial promises.

Binance goes public Rejected Meanwhile, it gave way to many further concerns. blog post Alleges suspicious activity between Binance and its US counterpart, Binance.US.

“These findings dovetail well with previous reports by Forbes and Reuters showing that Binance.US was a sophisticated trick designed to fool regulators and customers,” said Dirty Bubble. I am wrapping up a blog post from an entity calling itself Media.

“But with the demise of FTX, everyone’s eyes are on the cryptocurrency industry. I don’t think Binance’s regulatory Tai Chi response will allow Binance to escape the rule of law for long.”

Mr. Zhao, on the other hand, did not spend time on any form of accusation on Dec. 17. repeat His “FUD” perspective. He later retweeted the words of Ryan Serkis, founder of analytics platform Messari, saying there was an element of xenophobia in the criticism of Binance.

“A good portion of Binance FUD is thinly veiled xenophobia,” Selkis said. I have written 2 or more tweets.

“I’m all for deposit stress testing and I don’t think it’s good for such a high percentage of trading volume to go through a single exchange. Also, I don’t like the tone of some of the criticism. Sorry. !”

Nevertheless, Binance, like Cointelegraph, remains one of the potential BTC price triggers. I got it last week.

Miners outperform the competition

Bitcoin’s network difficulty is set to start rising again this week after its biggest drop in almost 18 months.

according to estimates from BTC.comthe next bi-weekly difficulty recalibration will see an increase of approximately 3.8%.

An overview of the basics of the Bitcoin network (screenshot). Source: BTC.com

This affects miners who have experienced considerable upheaval in the weeks since the FTX collapse caused BTC/USD to drop by up to 25%.

while putting pressure on profits concern The miners began to think that another major surrender event was scheduled and that they would withdraw from the operation en masse.

Recently as Cointelegraph reportBut not everyone agrees. Recent interpretations of the data lead to the conclusion that most of the accommodation has already taken place.

This theory is still a valid observation as the difficulty rises again. Increased difficulty means more competition among miners, not a setback.

Data from an on-chain analytics company glass node Additionally, the 30-day drop in miner BTC holdings shows a pullback as selling cools.

30-day net position change chart for bitcoin miners.Source: Glassnode

Meanwhile, journalist Colin Wu analyzed the overall share of miners in BTC supply and argued that their position does not necessarily matter.

“Bitcoin miners are currently estimated to hold a maximum of 820,000 bitcoins and a minimum of 120,000 bitcoins, accounting for only 1% to 4% of Bitcoin in circulation. Even with the sale of 350% of production in June this year, the impact has weakened,” said Wu. murmured over the weekend.

Estimated BTC holdings chart of Bitcoin miners.Source: Colin Wu/Twitter

Sentiment forecast to drop to 2022 lows

It’s no secret that cold feet is the name of the game when it comes to cryptocurrency sentiment this quarter.

Related: Bitcoin still lacks on-chain signals for Bitcoin bull market – David Puell

Thanks to FTX and now Binance, there is a clear sense of doom on social media, and the price action across crypto assets is yet to paint a different picture.

but, Cryptosphere & Greed Index has far outperformed expectations and is still above the lowest ‘extreme greed’ bracket.

At 29/100, you could even say the index is a bit off the beaten path.

But for Crypto Tony, it will be short-lived, with the index returning to this year’s low of 6 in 100 in 2023.

“When we are in extreme fear, it is considered a good buy zone. If we are extremely greedy, it is a sell zone. explained.

“We hit 6 in June‼️ I think we will be back next year.”

Fear & Greed ended “Extreme Fear” at the end of November and has yet to return, hitting a high of 31 on December 15th.

Crypto Fear & Greed Index (screenshot). Source: Alternative.me

The views, thoughts and opinions expressed herein are those of the authors only and do not necessarily reflect or represent the views or opinions of Cointelegraph.