One metric warns that there will be a shakeout among bitcoin miners as the November monthly comparative approaches for BTC.
What Is The Price Of Btc This Week?
Bitcoin is getting ready to leave a rough November just above $16,000. What could the BTC price do this week?
In a time of what analyst Willy Woo has called “unprecedented deleveraging,” when a lot of debt is being paid off, Bitcoin is not out of the woods even though it has lost over 20% this month.
What’s The Effect Of FTX Implosion?
The effects of the FTX implosion are still unknown, and even after the first wave of crypto businesses went out of business, warning signs are still coming in.
This week, people are especially interested in miners, whose profits are getting smaller because the spot price is going down and the hash rate is going up.
Change is on the way, and if another group of miners “capitulates,” the whole ecosystem could be in for another shock.
Affect Of BTC/USD Exchange Rate
As “max pain” approaches for the average Bitcoin holder, Blockchain Gossips looks at some of the main things that will affect the BTC/USD exchange rate in the short term.
Bitcoin miners due “capitulation” — analyst
Like everyone else, Bitcoin miners are having a hard time making money by selling their BTC.
It’s still not clear how bad the average miner’s financial situation is, but one classic measure is getting ready to call “capitulation” once more.
Hash Ribbons is warning that things are again getting out of hand just a few months after the last time this happened.
Read more: Will Bitcoin Shoot Over $100k In 2023?
Is The Market In A Capitulatory Or Recovery Phase?
Hash Ribbons takes two moving averages of the hash rate and uses them to figure out how much a miner is involved in the Bitcoin network. When the trend lines cross, it means that the market is in a capitulatory or recovery phase.
Kripto Mevismi, who works on the on-chain analytics platform CryptoQuant, thinks that the time is getting close for the former to come back.
“Right now, the difficulty of mining bitcoin is really high, which means costs are going up and doing business is getting harder,” he wrote in a blog post.
“This is why miners don’t work as hard as they could. If they have efficient, new-generation mining machines, they put them to work, but that’s it. People feel the effects of high inflation and rising costs of living, the price of bitcoin is going down, and the cost and difficulty of mining are going up. Miners work in a tough environment.”
Kripto Mevismi also said that a big change in how hard it is to mine could help.
At the time of writing, BTC.com thought that the difficulty drop for the next change on December 6 would be 6.4%. If it happens, it will be the biggest drop like this since July 2021.
BTC.com and others also think that the hash rate is dropping from its record high as miners stop working.
An overview of the basics of the Bitcoin network (screenshot). From BTC.com.
BTC/USD looks for volatility before the end of the month
At the end of the most recent candle on Nov. 27, BTC/USD was able to avoid big weekly losses.
Read more: Which Is Superior Between Ethereum Classic And Ethereum?
Cointelegraph Markets Pro and TradingView data shows that the weekly close was just a little bit higher than the previous week, at around $16,400. However, the pair is still near its two-year lows.
Since intraday price action is not very volatile, traders and analysts are still not sure what to do next.
Material Indicators, an on-chain analytics resource, said in part of a tweet last week, “It’s a long holiday weekend, so expect things to get interesting as we move toward the Weekly and Monthly closes.”
Is BTC/USD Down?
In a later post, it was said again that the close of the market on November 30 would likely cause more instability, since BTC/USD is down 21.25% since the beginning of the month.
This makes November 2022 the worst November for Bitcoin since 2018, when it had its last bear market year.
Chart of the monthly changes in BTC/USD (screenshot). Coinglass is a source.
Crypto Tony, a well-known trader, pointed out that on shorter timeframes, $16,000 is a key area to flip for higher levels to enter next, while keeping in mind the longer-term trend.
“Lower highs and consolidation below a major area of resistance. “If you want to get in safely, you should wait until the lows flip,” he said over the weekend.
As Cointelegraph has reported in depth, the next bottom of Bitcoin’s bear market is the talk of the town right now, and some targets have become more popular than others.
Il Capo of Crypto, who has been very vocal about wanting more drops, said again that BTC/USD could go down to $12,000.
Using the relationship between the number of trades in perpetual futures and the spot price, he warned that the current structure of the market did not support more gains.
“12000-14000 is likely. “Altcoins will drop by 40–50%,” he said.
Under the Bitcoin sea, hodlers are adding to their holdings. This month, people in the Bitcoin ecosystem are “aggressively” adding to their BTC exposure, no matter how big or small they are.
Accumulation seems to be picking up speed, which is a good sign for a future supply squeeze in which demand meets a larger amount of illiquid supply.
On-chain analytics company Glassnode says that the current trend is mostly caused by small investors.
The number of small investors, who are called “crabs” or “shrimps” depending on how much money they have, is growing.
“Bitcoin Shrimps (less than 1$BTC) have added 96.2k $BTC to their balances since FTX went down, which is an all-time high. “This group of people now owns more than 1.21 million $BTC, which is 6.3% of the total supply,” Glassnode showed in a Twitter thread about the trend.
A second post said:
“Over the last 30 days, the balances of crabs with up to 10 BTC have grown quickly by 191.6k BTC. This is a clear all-time high, beating the peak of 126k $BTC/month in July 2022.”
Bitcoin “crab” net position change chart. From Glassnode and Twitter.
Cointelegraph said that some of the rise in the number of smaller wallets could be due to people taking money out of exchanges and putting it in private storage.
Woo sends out “max pain” flags.
Willy Woo, who runs the popular statistics site Woobull, thinks that on-chain metrics show that Bitcoin’s next macro bottom is coming soon.
Woo showed this weekend by focusing on three of them that Bitcoin is acting almost exactly the same as it did at the bottom of previous bear markets.
The “Max Pain” model describes a situation where the amount of BTC held at an unrealized loss is getting close to macro lows.
“The Max Pain model says that Bitcoin is getting close to the bottom. In the past, the BTC price bottoms out when 58%-61% of coins are underwater (orange). “The coins that are locked up in GBTC Trust are shown in green,” Woo said next to a chart.
He went on to say that the MVRV Ratio value for BTC/USD is also heading toward a “buy” zone, which in the past has given investors the best chance of making money.
MVRV is the market value of Bitcoin divided by its realised value, which is the sum of the last prices at which each Bitcoin changed hands. The number that came out of it has given buy and sell zones that match price extremes.
Woo’s commentary said, “MVRV ratio is deep inside the value zone.”
“Under this signal, we were already bottoming (1) until the latest FTX white swan mess put us back into a buy zone (2).”
Bitcoin MVRV chart with notes. Source: Twitter/Willy Woo
Cumulative Value Days Destroyed (CVDD) is Woo’s third chart. Cointelegraph just wrote about it.
What Will Happen In The Future?
“Use these charts at your own risk. We are in a time of deleveraging that has never happened before,” he said, adding that “past cycles don’t always show what will happen in the future.”
Protests in China shook up the global economy.
This week, the US will release some important economic data, but crypto analysts are more interested in China.
Some people warn that unrest in the world’s factories could shake up the performance of the market, which is already based on inflation trends.
China is in the middle of a wave of protests against the government’s policy on COVID-19. Multiple cities are defying lockdowns to demand an end to “COVID zero.”
Keeping this in mind, if things get out of hand, risk assets could be in for a rough ride.
“Bitcoin couldn’t break through a key area, so we’re still consolidating in that range. On support right now,” Eight’s founder and CEO, Michal van de Poppe, said.
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“If this is lost, I’d expect the markets to hit new lows, though it might depend on how China and FTX spread this week.”
Even mainstream media warned of possible consequences that day. John Toro, head of trading at exchange Independent Reserve, told Bloomberg that “elevated contagion risk is being profiled in the cryptocurrency complex.”
As of the time this article was written, Hong Kong’s Hang Seng and China’s Shanghai Composite Index were down 1.6% and 0.75 %, respectively.
Bonus: Bitcoin Reaches A Low Point In Crude Oil
In a related macroeconomic story, a well-known analyst has said that Bitcoin is now set to “outperform” the U.S. dollar.
In terms of WTI crude oil, BTC price action is already at a macro low, and history shows that a resurgence is likely, along with a strong trend of appreciation against the USD.
TechDev said over the weekend, “We’re finally at the bottom of the channel.”
“The most crude oil that could be bought with Bitcoin was in April 2021. Now looks like it will continue to do better than the USD (and the USD’s value will rise).
bitcoin
A chart that went with the article showed how Bitcoin did at the bottom of the last bear market in late 2018.
Bitcoin To Go Up Going Into The New Year
TechDev isn’t the only one calling for the price of Bitcoin to go up going into the new year, as Blockchain Gossips reported.
