Bitcoin (BTC), which begins a new week with a high in many ways, seals its highest weekly close as BTC/USD.
After days of slow progress, Bitcoin finally made a breakthrough move to the upside and passed crucial levels.
After a week of record-breaking altcoin prices, some traders are now ready to “parabolic” the largest cryptocurrency.
Is “Moonvember” finally living up to its name. Cointelegraph looks at what could move the market over the next few days.
As the BTC crosses $65,000, a large futures gap opens
It took bulls a week to get used to, but on Sunday, Bitcoin flew, recovering its April record of $64,900.
The bull run was characterized by rapid gains. One hourly candle saw $2,000 more than the spot price.
It was perfect timing, as it happened just before the weekly close. This allowed for a new record of $63,270 on the weekly chart.
It’s going to be a busy week
— Barry Silbert (@BarrySilbert), November 7, 2021
As higher short-term forecasts returned, it was predictable that reactions were overwhelming positive.
Scott Melker, podcast host, said “Resistance to futile” alongside a chart that shows Bitcoin’s trend breakout.
The weekly all-time high was not the only milestone in the crypto market. For the first time, the total market cap for all tokens exceeded $3 trillion.
Cointelegraph reported that Bitcoin’s long-term potential remains optimistic. Many people agree with the notion that Bitcoin will continue to reap the benefits of its current cycle.
Popular analyst Rekt Capital stated that people who think it’s too late for Bitcoin don’t realize how much higher it could go in this cycle.
Filbfilb, an analyst and co-founder of trading platform Decentrader has meanwhile identified one possible cause for correction: the CME futures gap.
Markets will open Monday significantly higher than Friday’s close, so spot could temporarily return to Friday’s levels to fill the gap. This is consistent with historical patterns.
He stated that he was bullish about rn and might retrace towards the cme gap, but overall he thinks it looks like fire imo.” Telegram subscribers were also informed by him.
CME Bitcoin futures 4-hour candle charts Source: TradingView
As “extreme greed” awaits, funding grows
Other than the CME gap and derivatives cues, there may be another option that could put the cat amongst the pigeons in short timeframes.
At the time of writing, data showed that funding rates across all exchanges were trending back towards unsustainable territory.
Although the amount of funding is not as great as in the October run to $67,000 or more, it can often lead to a correction in the price as traders become complacent and long for the market.
Dylan LeClair, analyst, said that this was not a concern as there were no signs of leveraged longs increasing.
He told his Twitter followers that Bitcoin +$2,000 was achieved in the past couple of hours, with no significant upticks in futures open interests or perp financing.
“Current price action results from spot selling exhaustion and not a sudden increase of leverage.” Gap upwards = no sell-side liquidity
Chart of BTC funding rates. Source: Coinglass
According to the Crypto Fear & Greed Index, market sentiment is trending towards “extreme greed”.
The Index indicates that the Index is at least 75/100. However, it suggests that there are still at least 20 points to go before classic top conditions enter.
Crypto Fear & Greed Index. Source: Alternative.me
Here’s why miners aren’t still selling:
Bitcoin miners are showing great resolve, not selling their BTC as they look to hit new highs.
CryptoQuant’s on-chain analytics service CryptoQuant has shown that outflows from miners wallets have remained flat in recent weeks, and even months.
Bitcoin miner outflows chart. Source: CryptoQuant
It could be because, since the block subsidy halving in May 2020, when miners’ revenues in BTC terms dropped 50%, their USD income has risen.
Glassnode, a fellow analytics firm, commented Monday that despite the reduction in BTC-denominated income, miner revenues in USD are up 550% since 2020 halving and approaching an average ATH of $62M+ each day.
A chart was attached that showed how miners have been able to capitalize on their positions, and how much it has paid to hodl during the current four year halving cycle.
Annotated chart: Bitcoin miner revenue vs. BTC/USD Source: Glassnode/ Twitter
Cointelegraph has previously pointed out that the behavior of miners in Q4 is quite different from the beginning of the year.
In spite of the fact that BTC/USD traded at much lower levels today, Q1 outflows were significantly higher.
Hash rate shows “sheer resiliency”
The bullish mood among miners is accompanied by an “up only” narrative about the mining hash rate.
The Bitcoin network hashrate is a measure of the computing power used to maintain the blockchain. It continues to recover rapidly from the May ban by China.
The metric has almost erased the impact of the event in record time as miners move to the U.S.A. and other countries, and existing operations increase their capabilities.
LeClair posted in comments on Twitter that “The recovery after the China mining ban has shown the sheer resilience, robustness and decentralized nature the Bitcoin network for everyone to see.”
The hash rate can vary depending on how it is estimated. It cannot be determined exactly. The seven-day average of Blockchain was 161 exahashes per seconds (EH/s) as of the writing. The live all-time high was 168 EH/s.
Chart of the 7-day average bitcoin hash rate. Source: Blockchain
Network difficulty is still a possibility for further gains, having seen eight consecutive increases in hash rate.
At current prices, the difficulty level will increase by approximately 3% to 22.33 Trillion in five days — a number that is close to all-time highs before the China crisis.
CPI data can cause inflation worries
The macro markets are still dominated by inflation, which continues to be a positive headwind for Bitcoin’s appeal as a hedge.
Related: Top 5 Cryptocurrencies to Watch This Week: BTC. DOT. LUNA. AVAX. EGLD
Expectations are that there will be a widening gap between reality and projections with the release of U.S. consumer prices index (CPI) data this week.
Bloomberg reports that the Federal Reserve recently indicated it would reduce asset purchases. One analyst said that Bloomberg may force them to reverse their decision.
“We believe there is upside risk in both of these CPI numbers, and as such, there is a risk that the Fed might actually accelerate pace of asset purchase,” Mahjabeen Zaman, senior investment specialist at Citigroup, said.
Cointelegraph has previously stated that CPI is not a good measure of inflation because it does not include many assets that are experiencing the greatest price and value growth.
This has led to calls to adopt Bitcoin to preserve the purchasing power both of individual savers as well as cash-rich corporations. It was also a key factor in MicroStrategy’s decision to convert large portions of its balance sheets to BTC.
CEO Michael Saylor stated that Bitcoin’s killer use case is as a store of value and treasury asset. He spoke out in separate media interviews last week.
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