Bitcoin (B T c) The start of the first week of December looks better than the beginning of 2022 – above $40,000.
Bulls are cheering BTC price action as the month started, with the weekly close providing the first trip above the $40,000 mark since April last year.
Shorts are being wiped out and liquidity is being drained as bullish sentiment is fueled by macroeconomic changes and anticipation of the United States’ first spot price exchange-traded fund (ETF).
Despite the misgivings and predictions of a major price retracement by some, Bitcoin offers little relief for sellers who constantly miss out on profits or wait on the sidelines for an entry price that never comes.
The party mood isn’t just reflected in the markets – Bitcoin miners are busy preparing for the halving, and with the hash rate already at its all-time high, this trend is set to continue this week.
Are there more gains to come or is Bitcoin getting ahead of itself?
This is the question long-time market participants will be asking in the coming days as the legacy markets open and adjust to the post-$40,000 BTC price.
Cointelegraph takes a closer look at the state of Bitcoin this week and examines potential volatility catalysts for hodlers.
Bitcoin Surges Over $40,000 – But Serious Corrections Still Remain on Watch List
As the month has gone on, Bitcoin has been reminding investors of “Uptober” – by eliminating shorts and beating key resistance levels.
The fun started with the weekly close, which saw $40,000 appear for the first time since April last year.
However, the bulls did not slow down there, and BTC/USD continued to rise to the current local high of $41,800, as the data showed Cointelegraph Markets Pro And trading view Confirms.
In doing so, Bitcoin wiped out short positions worth more than $50 million on December 4 alone, according to the data. coinglass – The highest single-day number since November 15.
Perhaps understandably, with many traders calling for a continued bullish move towards $50,000, leveraged short liquidity is slowly disappearing as BTC price performance continues to surge.
#bitcoin Continue to work through 3x, 5x, 10x short liquidity. pic.twitter.com/aRwvJil3c6
– Decentrader (@decentrader) 4 December 2023
Popular trader Skew wrote during this time, “Someone here is still aggressively chasing the price.” coverage Live market movements.
“More importantly, whether the larger market entity actually allows some bids to be filled or not. If filled they are expected to increase in price. “Clearly $40K is the price for institutional players.”
However, not everyone is so convinced that the good times will continue.
For popular trader Crypto Chase, the current levels represent an ideal spot for a late “trap” and take Bitcoin below $10,000.
“After the low 40s we look at the low 30s. Wrong, essentially 1:1 trading in the 50s,” he originally told subscribers on X (formerly Twitter) on November 23 in a post that he reiterated that day.
$BTC Idea
Low 40 would be a perfect bull trap for IMO.
• The bear stopped the trigger (I originally stopped here but opted for manual intervention weeks ago).
• Fresh wave of bull FOMO at “broken resistance”. Exit liquidity was generated.
• Monthly resistance *looks* like it…– Crypto Chase (@Crypto_Chase) 22 November 2023
“For me, this cycle is no different from others. Right now it is only up, soon it will only come down. This is essentially how $BTC has always traded,” he said Ongoing In the latest analysis part.
“I believe the current prices have gone too high. Will be added to shorts at 43K.”
Markets eager for Fed pivot in countdown to FOMC
Last week’s collection of US macroeconomic data reports did little to move Bitcoin out of a narrow trading range at the time.
He everything started changingHowever, when Federal Reserve Chairman Jerome Powell took the stage, many interpreted it as a signal that a significant change in economic policy was about to occur.
This will come through the Fed beginning to lower benchmark interest rates – a key moment for crypto and risk assets that will be first in line to benefit from increased liquidity deployment by traders currently in cash.
As Cointelegraph informed of, this Fed “pivot” was not previously expected or hinted at by officials until at least mid-2024, but recent forecasts have pushed the unofficial deadline sharply forward. Bill Ackman, CEO and founder of hedge fund Pershing Square Capital Management, said last week that he expects a turnaround in the first quarter.
“I think they’re going to cut rates; I think they’re going to cut rates sooner than people expect,” he told Bloomberg at the time.
Before the new year, the Fed will make another decision on rates, expected within two weeks. Last week’s data print, which confirmed the story of slowing inflation, thus significantly contributed to that decision – which is due to be released this week and next falls under the Fed’s “blackout period,” where officials are allowed to adjust policy. Comments are not allowed.
According to CME Group data fadewatch toolMarkets believe that rates, although not likely to fall immediately, will remain at current levels after the decision.
This week’s prints included non-farm payrolls and other employment data, at a time when the US unemployment rate is near historic lows.
“There will be a lot of employment data coming out this week that will have a huge impact on next week’s Fed meeting. Last month of trading 2023,” financial commentary resource The Kobe Letter wrote in part of its weekly overview of key macro diary dates.
Major events of this week:
1. Jolts Job Data – Tuesday
2. ISM Non-Manufacturing PMI – Tuesday
3. ADP Nonfarm Employment Data – Wednesday
4. Preliminary Jobless Claims Data – Thursday
5. Consumer Sentiment Data – Friday
6. November Jobs Report – Friday
We are out for a week…
– Kobeissi Letter (@KobeissiLetter) 3 December 2023
Gold price surge as US liquidity pulls back raises concerns
Others noted that the gains in Bitcoin and crypto are likely due to more than just data.
They are all functions of global liquidity.
Global liquidity increases, and they all follow. pic.twitter.com/Zekzclup6g
– Philip Swift (@PositiveCrypto) 4 December 2023
The Fed’s reverse repo facility is rapidly tapering off, allowing excess liquidity to flow into the economy – potentially the key variable for risk asset performance around the world.
“This is money that would otherwise be deposited with the Fed overnight that is entering the economy/market. This helps drive out risk assets and bring down $DXY,” Dan Crypto Trades wrote In the comments on the attached chart.
The US Dollar Index (DXY), a measure of the US dollar’s strength against major trading partner currencies, is currently in the midst of a modest bounce after hitting a four-month low last week.
Liquidity in the crypto sector is on the radar of institutional names, among them Dan Tapiero, founder and CEO of 10T Holdings.
He argued last week that the recent U.S. bond debacle provides a rare buying opportunity comparable to the 2008 global financial crisis and the 2020 COVID-19 crash, and again concluded that liquidity should be driven by stocks and Must do “quickly” in Bitcoin.
Nothing lasts forever.
h/t @apompliano For chart.
Next year interest rates will peak/yields will become very low.
The 2 biggest buying opportunities of the last 40 years in equity equivalent are now in bonds.
Came back to 3% after 2 years.
liquidity comes in #NASDAQ #bitcoin #Sleep pic.twitter.com/uTwBErJt2I
– Dan Tapiero (@DTAPCAP) 1 December 2023
Charles Edwards, founder of the quantitative Bitcoin and digital asset fund Capriole Investments, was one person who preempted Fed action by noting liquidity trends – with the largest US financial easing in forty years scheduled to take place in November. .
November saw the biggest relaxation in more than 40 years! https://t.co/cRRVIpgDFj
– Charles Edwards (@caprioleio) 4 December 2023
As Cointelegraph informed ofGold is already reacting, hitting new dollar all-time highs and rising nearly 4% on the day ahead of a correction.
Such behavior is unusual, others argue, leading to fears of “something big” happening this week.
Something big is coming tomorrow. On Sunday night, gold crossed its all-time high.
Does anyone know something?– Tom Crown (@TomCrownCrypto) 3 December 2023
“As long as someone isn’t getting fired immediately after shorting gold, it’s saying something important,” said the popular social media commentator and trader known as Horse. suggested,
“Sunday gold doesn’t get sold arbitrarily like this unless it makes sense.”
Responding, popular trader Bluntz also expressed concern about the ongoing cross-asset bounce, saying it is mostly focused on inflation trends around the world.
Bitcoin miners push hash rate steadily higher
There is little standing in the way of Bitcoin miners and their desire to cover themselves in the April block subsidy halving.
my immediate thought when #bitcoin Pumps, the miners have to work so hard to pump directly.
– James V. Stratton (@jimmyvs24) 2 December 2023
last month, estimated hash rate reach new record highs and Passed 500 exahash per second (EH/s) For the first time in the history of Bitcoin.
The trend is not going anywhere as December begins – the next difficulty readjustment will add an estimated 1.6% to the already record high number, reflecting the intensity of competition for block rewards.
Per data from statistical resource btc.comThis would be Bitcoin’s seventh consecutive upward adjustment.
“The Bitcoin hashrate will enter its parabolic upward phase this cycle as the fourth and final phase of mining is in front of us,” said Nick Cote, founder and CEO of digital asset marketplace Secondlane. Predicted In part of the recent X commentary.
“Sophisticated players who have ∞ resources and government alignment will put a boot on the necks of unskilled miners as deployment rates accelerate.”
Alex Thorn, head of firmwide research at crypto education resource Galaxy, meanwhile referenced the firm’s “bull case” for the hash rate becoming a reality.
“It’s one of the most interesting charts in the world at the moment,” he said told The hash rate number is about X subscribers.
“A picture is worth a thousand words.”
Greed matches Bitcoin’s all-time high of $69,000
The latest trip to a 19-month high is likely to fuel crypto market greed even more.
Connected: Bitcoin ETF to fuel 165% BTC price rise in 2024 – Standard Chartered
data from Crypto Fear and Greed Index – Benchmark sentiment indicator – already puts greed levels at the highest level not seen since November 2021, when Bitcoin set its latest all-time high.
A lagging indicator, fear and greed had not taken the trip over $40,000 at the time of writing, but still stood at 74/100 – on “Extreme Greed”.
The index uses a basket of factors to determine the overall sentiment among crypto investors. Its implications are useful in predicting market trend reversals when fear or greed reaches unsustainably high levels.
To that extent, the peak of $69,000 represents an anomaly – historical precedent demands that a correction be recorded when the index passes 90/100. Thus the current bull market may still have some room to run before irrational exuberance takes over, commentators believe. argued first,
This article does not constitute investment advice or recommendations. Every investing and trading move involves risk, and readers should do their own research when making decisions.
