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BTC Price Has Not Reached ‘Maximum Pain’ Yet — 5 Things You Need To Know About Bitcoin This Week

Bitcoin (BTC) starts the new week in a volatile place as global macro volatility sets the mood.

The largest cryptocurrency is still lacking direction as tensions mount over the resilience of the global financial system after sealing its close just above $19,000 for weeks.

The past week has been a trying time for risk asset investors with dismal economic data coming out of the US and even Europe.

The eurozone thus provides the backdrop for the latest concerns of market participants who are seeing the financial buoyancy of major banks called into question.

With the war in Ukraine raging and winter approaching, it’s probably understandable that few are optimistic.

BTC/USD remains below the all-time highs of previous halving cycles and is even talking of new multi-year lows when compared to the 2018 bear market.

With Bitcoin still well below $20,000, Cointelegaph looks at five BTC price drivers to watch over the next few days.

Spot prices avoid years of low weekly closes

Data from Cointelegraph Markets Pro and TradingView show that Bitcoin’s weekly close could be even worse despite the bearish mood.

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

Nonetheless, the previous close was the lowest since November 2020 on the weekly timeframe, and as such, traders continue to fear the worst is yet to come.

Popular trader Crypto Tony said, “The Asian markets had a full swing last night, but the bulls failed to give us a good rally.” I have written Part of the Twitter update of the day.

others agreed Our summary concludes that BTC/USD is in a “low volatility” zone and will need a breakout sooner or later. All that was left to do was set the direction.

“We have the next big move,” says Credible Crypto responded.

“Usually before these big moves and after the capitulation, we see a period of low volatility before the next big move starts.”

As reported by Cointelegraph, the weekend was already tipping towards pushing up volatility, as Bollinger Bands data suggests. This goes hand in hand with increased volume, a key factor in sustaining potential movement.

“Weekly Chart BTC Shows Significantly Increased Volume Since Beginning Of Q3 + Shows Weekly Bullish Divergence On One Of The Most Trusted Timeframes,” Fellow Trading Account Doctor Profit Conclusion.

“Bitcoin price increase is only a matter of time.”

But not everyone had their eyes on the imminent comeback.of predict Meanwhile, over the weekend, Crypto trader Il Capo put forward an area between $14,000 and $16,000 as a long-term target.

BTC/USD annotated chart. Source: Il Capo on Crypto/Twitter

“If this was a real bottom… Bitcoin should be trading close to 25k-26k by now,” says trading account Profit Blue claimedshowing a possible double-bottom structure chart being created on the 2-day chart.

Credit Suisse upsets as dollar strength goes nowhere

Beyond cryptocurrencies, the focus is on the fate of major global banks, notably Credit Suisse and Deutsche Bank.

Liquidity concerns led to an urgent public guarantee from the former CEO, with executives reportedly spending the weekend trying to calm down major investors.

Bank failures are a thorny problem for underwater hodlers. Bitcoin’s creation was first spawned by a 2008 government bailout to lenders.

Nearly 15 years later, history has become more rhyme, but the story of Credit Suisse has not gone unnoticed.

“You can’t look inside a CeFi company, Credit Suisse, just like you couldn’t look inside a CeFi company like Celsius or 3AC,” said entrepreneur Mark Jeffery. murmured Compare that day to the crypto fund meltdown earlier this year.

For Samson Mow, CEO of Bitcoin startup JAN3, the current environment is giving Bitcoin a time to shine amidst the crisis rather than maintaining its correlation with other risky assets. You may still be giving.

“Bitcoin’s price has already been pushed to its limits, well below the 200 WMA. claimedreferring to the long-lost 200-week moving average as bear market support.

“There is an epidemic from UST/3AC and leverage has already been flushed. BTC is being massively shorted as a hedge. It will never fall.”

Nevertheless, with instability already prevalent across the global economy and geopolitical tensions rising, the Bitcoin market is voting at its feet.

The US Dollar Index (DXY) is just three points away from its most recent 20-year high, but continues to circle in search of a possible rematch after limiting correction movement in recent days.

Looking further ahead, macroeconomist Henrik Seberg echoes the theory that the DXY could temporarily boost stocks significantly. However, this does not last long.

“By early 2023, the DXY will rise again, with a target of 120 or less. I have written part of a tweet.

“Biggest deflationary collapse since 1929”

US Dollar Index (DXY) 1-day candlestick chart.Source: Trading View

Miner Earnings Metrics Near All-Time Low

With Bitcoin’s price suppression increasing, it’s no surprise to see miners struggling to remain profitable.

At some point in September, monthly sales from miners exceeded 8,500 BTC. The numbers have since declined, but the data shows that the situation is precarious for many.

Dylan LeClair, senior analyst at digital asset fund UTXO Management, said: clearly On the weekend.

“Margin Squeeze”.

Bitcoin miner earnings per terrahash chart. Source: Dylan LeClaire/Twitter

This scenario is interesting for the mining ecosystem, which is currently deploying higher hash rates than almost any time in history.

Estimates from monitoring resource MiningPoolStats put the current Bitcoin network hash rate at 261 exahash per second (EH/s), just below the all-time high of 298 EH/s seen in September.

Competition among miners remains healthy as well, as evidenced by the difficulty adjustments. Last week he saw his first decline since July, but difficulty is set to set a new all-time high, adding an estimated 3.7% in his seven days.

That said, it may be too early for economist, trader, and entrepreneur Alex Krueger to breathe a sigh of relief.

“Bitcoin’s hash rate hitting an all-time high while the price is falling is more of a recipe for disaster than a cause for celebration,” he wrote. thread About last month’s minor data

“As miners’ profitability gets squeezed, the chances of another round of miners surrendering if they fall increases. But hopium never dies.”

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

GBTC ‘discounts’ hit all-time low

The largest institutional investor in the space has never been such a bargain, reflecting the outflow of institutional investors from BTC exposure this year.

The Grayscale Bitcoin Trust (GBTC), which traded well above Bitcoin’s spot price during the good times, is now offering the biggest discount to BTC/USD ever.

According to data from Coinglass, GBTC’s “premium” (actually a discount) reached -36.38% on Sept. 30, while BTC was only priced at $11,330.

Since February 2021, the premium is now negative.

Venturefounder, who analyzes the data and is a contributor to the on-chain analytics platform CryptoQuant, said: explained GBTC falls to ‘absolutely wild’.

“Yet there are no signs of a bottoming out or a reversal in GBTC discounting yet,” he said. commented.

“Institutional investors are not eyeing $12,000 BTC (locked for 6 months).”

GBTC premium vs. holdings vs. BTC/USD chart.Source: Coinglass

Cointelegraph has been tracking GBTC for a long time, and owner Grayscale is seeking legal permission to convert it and launch it as a cash exchange-traded fund (ETF), but this is subject to U.S. regulations. still banned by the authorities.

But for the time being, the lack of institutional appetite for BTC exposure is like an elephant in the room.

“Objectively speaking, I don’t think US-based institutional investors are very interested in $BTC until $GBTC approaches net asset value.” I have written last week.

Charting Bitcoin’s ‘greatest pain’ scenario

It’s safe to say that Bitcoin’s new price drop has many hodlers questioning their investment strategies, but it remains to be seen whether this bear market will mimic previous ones.

RELATED: $17.6K BTC Price Bottom Analyst: Bitcoin ‘Not There Yet’

For analyst and statistician Willie Wu, creator of the data resource Woobull, the next bottom could have a lot to do with Hodler’s surrender.

Earlier in Bitcoin history, bear market bottoms saw at least 60% of BTC supply trading at a loss.

So far, the market has barely, but completely, mimicked that trend, and Woo concludes that the “biggest pain” may still be around the corner.

“This is one way of visualizing the greatest pain,” he said. I have written Along with one of his charts showing underwater supplies.

“Past cycles bottomed out when about 60% of the coins fell below their purchase price. Can we hit again? I don’t know.

As of October 2, 9.52 million BTC had suffered losses, according to on-chain analytics firm Glassnode. Last month, the BTC unit index hit its highest since March 2020.

Bitcoin supply on loss chart. Source: Glassnode

The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. All investment and trading movements involve risk. You should do your own research when making a decision.