Developments continue on behalf of the crypto money market. This week, developments that will affect SHIB and other altcoin projects, especially Bitcoin, are at the door. As Kriptokoin.com, we provide you with economic data that will affect BTC and the wider crypto money market.
How will Bitcoin and the wider cryptocurrency market be affected?
Bitcoin started the second week of November, battling a familiar FUD. So, how will the economy react to the events on the calendar in BTC price action? The leading cryptocurrency had a weekly close just under $21,000 on November 6. This level is the highest in the last few weeks. But it continues to move within a stable trading range.
Despite seeing highs near $21,500 last week, BTC has yet to break through the resistance zone. But next week has a chance to do so. On November 10, the US’s October Key Inflation Data will be released. Unemployment claims and numerous speeches by Fed officials may also trigger volatility in cryptocurrencies.
With all these developments, the cryptocurrency exchange FTX is in a turmoil involving Alameda Research and Binance. CZ, CEO of leading crypto exchange Binance, announced his plan to sell all FTX tokens on the platform. Then, concerns about liquidity increased. BTC, on the other hand, reacted overnight based on market sentiment. But then it will be questioned whether the event is more than just a classic crypto FUD.
Concerns in FTX spoil weekly close
While the weekly close declined, the BTC/USD pair still recorded the highest weekly candle close since mid-September. It highlights that the week of November 6 was capped at $20,900 on Bitstamp, according to data provided by TradingView. However, Bitcoin continues to maintain its trading range. It’s been moving around $19k to $22,800 from August to this time. Also, as we approach the upper end of the price range, news of FTX involving Binance has changed the landscape. As a result, this event caused Bitcoin to decline from $ 21 thousand.
Binance CEO Changpeng Zhao shared the following in his Twitter post:
As part of Binance’s exit from FTX capital last year, the exchange bought approximately $2.1 billion in cash equivalents of BUSD and FTT. Due to recent allegations, we have decided to liquidate all FTTs on the exchange.
Zhao acknowledges that markets can be impacted throughout. However, he added that it will take Binance “a few months” to dispose of the FTt tokens listed on the exchange. Meanwhile, FTX CEO Sam Bankman-Fried referred to “baseless rumors” about liquidity issues, saying:
We are grateful for the rest. When these events are over, we will welcome everyone back.
The market response has been less positive so far. It’s time for Bitcoin investors to take advantage of the one-week pullback they believe will cause further bullishness.
Crypto analysts state that dips can offer buying opportunity
Eight CEO and analyst Michaël van de Poppe says there will be an opportunity across the cryptocurrency markets in the short term. He said the dips provide “buying opportunities,” according to Poppe. However, another analyst says that the BTC price will continue at $ 21,500. He states that after that, it will be in a downtrend. The analyst, known as Capo, stated that he expects a decrease from the current levels.
CPI and US midterm elections
The Federal Reserve decided to raise interest rates by another 0.75 percent at the beginning of November. Then BTC and the broader cryptocurrency market started bearish action. If the Fed continues its hawkish stance, the declines in the crypto money markets will continue. Markets will follow the October Consumer Price Index (CPI) data, which is another important decision, this week.
Economists surveyed by Bloomberg put annual inflation at 7.9 percent, down 0.3 percent from September. As a result of a lower-than-expected CPI announcement, the Fed is likely to withdraw interest rate hikes sooner. From a theoretical point of view, it holds a chance for crypto and risk assets.
However, before the CPI and unemployment data, there are the US midterm elections that should be watched closely. Elections create a potential source of volatility for the markets. CryptoGod, a well-known social media influencer, says:
Personally, I’m in no rush to start buying yet. CZ vs SBF event, Tuesday midterm elections, Thursday CPI data, the crypto market is under the influence. This will be the biggest crypto week to mark the end of the year.
How will DXY and funds rates affect Bitcoin and altcoins?
The US Dollar Index (DXY) saw a dramatic 2 percent daily drop on Nov. He is currently trying to make up for lost ground. Also, as a warning signal from the bulls, Bitcoin funding rates are rising on derivatives exchanges. Maartunn, a contributor to on-chain analytics platform CryptoQuant, highlights that funding rates are currently at a 6-month high.
Funds rates are a mechanism used in perpetual contracts to keep their price close to the Bitcoin spot price. This effect can be detrimental as the price drop liquidates many extremely bullish positions. The following statements were included in the statement made by Maartunn:
Currently, Funding Rates are very high. Investors are looking at higher prices and are willing to pay significant interest. That doesn’t necessarily mean a decline in itself. However, when the price starts to move against the investors, they may have to exit their positions. Or they can be liquidated.
Cryptocurrency miners are struggling
Bitcoin’s network fundamentals are in an interesting, if not entirely bullish, state. Recent data from on-chain tracking resource BTC.com confirmed that network difficulty had decreased by 0.2 percent on Nov. This level is much lower than previously anticipated. As a result, the gains fell even as the hashrate hit all-time highs. For the miners who saw the decline, the consequences pose serious problems.
Sam Rule, market analyst at UTXO Management, pointed out the following in a statement last week:
It performs well below BTC.
Emotion indicator for Bitcoin hits three-month high
According to the Fear & Greed Index, expectations are running high as Bitcoin hits its highest level since September. Offering various labels, Fear & Greed reached its highest level since mid-August. At 40/100, optimism proved unsustainable as the market pulled back into the new week. As a result, as of November 7, 33/100 is firmly within the “fear” area.
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