BTC hits a new all-time weekly close: 5 things to watch out for about Bitcoin this week

An exciting week begins as the price of Bitcoin once again defies all-time highs and ETFs see a possible launch in the U.S. Bitcoin (BTC) simply refuses to make a loss this week as a drop below the USD 60,000 barely lasts an hour and the bearish momentum burns away once again.

After a fairly uneventful weekend, there was a typical decline on Sunday before a spectacular resurgence in the BTC / USD pair took place just an hour later. With this, the price of Bitcoin has not only preserved its bullish trajectory, but has also sealed its highest weekly close in history, around $ 61,500.

As the market prepares for the possible start of trading in the first Bitcoin exchange-traded funds (ETFs) in the United States, volatility is almost guaranteed, analysts say. Cointelegraph takes a look at five things to watch out for in the week the BTC / USD pair squares to all-time highs and institutional access takes a historic leap.

Bitcoin gives less than an hour to “buy during the dip”

When it seemed that the race to the all-time highs had hit a stone, Bitcoin again surprised everyone overnight. After losing $ 60,000 late on Sunday, the bullish momentum had no time for BTC price weakness, and before the BTC / USD pair hit $ 59,000, it embarked on an aggressive buying spree.

Hours later, the pair was back above not just $ 60,000, but $ 62,000, and has been holding there at the time of writing. The episode didn’t even affect Bitcoin’s weekly close, which despite volatility remained the highest ever – around $ 61,500. “The historic close of the week now means that BTC is well positioned to keep rising,” summed up trader and analyst Rekt Capital on Monday.

He added that the next phase of BTC price action will be “more volatile” than what has come before, in line with previous years of the 2013 and 2017 bull market. As various analysts celebrate the milestone of the weekly close, the upcoming open the US market could also provide excitement.

Monday could see the launch of the first Bitcoin ETF products with the blessing of US regulators, which comes when the BTC / USD pair is less than $ 3,000 from new all-time highs. When it comes to derivatives, funding rates on exchanges have also cooled since last week, bringing relief to those concerned about unsustainable hikes leading to a spike.

ETFs are hot, but not for everyone

Love it or hate it, this week is all about the Bitcoin ETF. When rumors about the green light of US regulation began to circulate late last week, the price of Bitcoin warmed, and this week it seems that the trend will continue. After years of rejections, the Securities and Exchange Commission (SEC) is preparing to witness the launch of two ETF products, both based on the CME Group’s Bitcoin futures.

These precede a long decision-making process that begins next month in relation to physical Bitcoin ETFs, those that have real BTC as their underlying asset and that are the subject of real interest to analysts. There is no guarantee that these traditional ETFs will be approved, and there are already concerns that the market could end up disappointed once again. However, with multiple applications to be decided, there are six months left for the SEC to take a step forward.

Optimism that the tide will turn in the crypto industry’s favor continues this week, as Grayscale confirms that it will apply to convert its flagship Bitcoin fund product into an ETF.

Grayscale’s fund, the Grayscale Bitcoin Trust (GBTC), has given much to speak for itself in recent weeks, trading at an ever-increasing discount to spot BTC, amid fears that institutional clients are voting with their feet in the run-up to the ETF launch.

The higher commissions of the former are one example of the competitive advantage debate, while some have pointed out that futures-based ETFs will not work as a suitable alternative by definition.

“For starters, most institutional players have direct access to CME futures. Typically, the main reason they would choose to trade ETFs rather than futures would be to avoid tracking error (against the spot price) of futures roll costs or price deviations from a contango or backwardation, “added cryptocurrency trading firm QCP Capital in a circular to subscribers of its Telegram channel on Friday. “As such, having the ETF based on CME futures defeats the fundamental advantage of ETFs; to follow the spot price as closely as possible. “

Difficulty is set at the seventh consecutive increase

The fundamentals of the Bitcoin network continue to impress this week, and difficulty is leading the pack. What is possibly the most essential characteristic of Bitcoin is going from strength to strength, and on Tuesday it will seal a seventh consecutive rise. The last time that happened was in 2019. That increase will push the difficulty back above $ 20 trillion for the first time since June.

This comes despite some volatility in the hash rate, with estimates now falling back down to 123 exahashes per second (EH / s), having surpassed 140 EH / s this month. However, with the overall uptrend still intact, concerns are rare amid news that the United States now provides a home for the lion’s share of Bitcoin’s mining powerhouse.

Supply shock predicts a “good year” in 2022

Although forecasts for the price of Bitcoin focus on what might be possible in the fourth quarter of this year, some are already looking further, and using data to reach even more bullish conclusions. One of the analysts painting a rosy picture for 2022 is Willy Woo, creator of the data resource Woobull and well known for his research on the Bitcoin market cycle.

Over the weekend, Woo highlighted the growing shortage of Bitcoin as likely fuel for sustained price compression. Historically, he noted, declining supply combined with more of that supply remaining in the hands of holders with no plans to sell creates a powerful bullish signal.

His metric, “Long Term Holder Supply Shock”, clearly shows this scenario multiple times throughout Bitcoin’s history. As Cointelegraph reported, long-term holders already control a near-record share of the BTC supply, making the fight for the remaining coins to be expected to be more heated than ever. This should be favored when a physical ETF is approved, something that could happen in November and continue for several months.

The BTC balance on the major exchanges tracked by CryptoQuant has settled at just under 2.4 million BTC after a precipitous drop in September.

The next Bitcoin bear market is coming

With so much excitement about the potential Bitcoin price cap this year and how high it could be, some analysts are already turning their attention to the other side: the bear market. Historically, nothing goes up in a straight line, and Bitcoin is no exception. Each halving cycle has seen a price spike the year after the block subsidy halving, followed by a mid-cycle price bottom. This cycle, according to several well-known market participants, will be no different.

Therefore, a price spike will be followed by a prolonged fall, in line with what happened in 2014 and 2018. For the popular Twitter analyst TechDev, this minimum should nevertheless be an order of magnitude greater than the previous one – up to USD 60,000-, but the process should start already before the end of 2021. “I want a longer cycle. Who doesn’t want it? But nothing I have seen at the macro level of the AP suggests that it will happen.” , he warned his fans over the weekend.

“Watch your indicators. 2-week RSI channel, RVI 92-93. If they touch, I’m out. Ignore them in the hope of a new paradigm and those who don’t will likely blow you away. ” Of several accompanying charts, one neatly showed how Bitcoin’s Relative Strength Index over two-week time frames neatly captured each peak. Twitter personality Rekt Capital also took the opportunity to remind his followers and subscribers of the need to take profit on time.

“People believe that BTC will never see another 80% bear market because it is now too mature an asset,” he argued. “Let’s not forget that a few months ago there was a correction of -53%. The average bear market is -84.5% deep. It is very likely that there will be one after this bull market. ” The weekend, however, produced an optimistic forecast for the bear market; Dan Morehead, CEO of Pantera Capital, stated

Reference: es.cointelegraph.com

Disclaimer: This press release is for informational purposes information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent the views of infocoin, and should not be attributed to, Infocoin.

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