Bitcoin started the new week even higher after hitting the highest weekly close in its history. So what’s next? Crypto analyst William Suberg takes a look at five factors that could influence Bitcoin price action in the coming days. we too cryptocoin.com We have compiled the analyst’s evaluations for our readers.
Giant scissors in the futures market
After a week of patience, the bulls regained control Sunday night and Bitcoin crossed $65,000. As is usually the case with bull markets, this rise has been rapid, with Bitcoin gaining $2,000 in just one hour. Bitcoin, which showed an increase in value just before the weekly close, broke a record by closing the week ending October 7 at $ 63,270.
On the other hand, the total value of the cryptocurrency market has exceeded $3 trillion for the first time in history. While optimism remains about Bitcoin’s long-term potential, it is widely believed that real returns are yet to be seen in the current bull market. Popular analyst Rekt Capital sums it up as follows:
Those who think it’s too late to buy BTC don’t realize how high it can still rise in this cycle.
Decentrader Co-Founder Filbfilb points to the CME futures spread as one of the few possible causes that could lead to a correction in the short term. On Monday, markets opened significantly higher than on Friday. Therefore, analyst William Suberg says that in line with historical behavior, the possibility of a decline to close the said scissors continues.
Funding rates for Bitcoin are rising rapidly
According to analyst William Suberg, besides the CME scissors, another derivative indicator points to problems in the short time frame. The analyst states that the data reveals that the funding rates in the exchanges are moving towards unsustainable levels. The analyst reminds that although funding rates are not as high as in October when Bitcoin crossed $67,000, high positive funding rates often result in a price correction.
On the other hand, analyst Dylan LeClair thinks that there is no need to worry as the number of leveraged longs has not increased:
BTC has rallied more than $2,000 in the past few hours, with no significant increase in futures open interest or perpetual futures funding rates. The current price action is behind the fatigue of spot sellers, not the sudden increase in leverage. While there is no liquidity on the sell side, the scissors are growing.
Analyst William Suberg says the Crypto Fear & Ambition Index reveals that market sentiment is rapidly moving into the “hyper-greedy” territory. However, the index measuring 75/100 points still shows that there is at least 20 more points for the price to peak.
Miners still not selling Bitcoin
Analyst William Suberg states that as a new record for Bitcoin is on the horizon, miners also continue to refuse to sell and save strongly, and data from on-chain analytics resource CryptoQuant reveals very little exit from wallets associated with miners in the past week and months.
The analyst says that the reason for this situation is that with the block reward halving in May 2020, miners’ income decreased by half in BTC, while the dollar value of BTC increased significantly. However, despite the decrease in BTC, miners’ revenue increased 550% in dollars over the given timeframe. The chart below reflects the extent to which miners are profiting from their positions and how the accumulation has benefited in the current four-year halving cycle.
Strong recovery in Bitcoin hash rate
According to the analyst, the fundamentals of the Bitcoin network also support the positive mood among miners. The hash rate, which refers to the processing power spent to operate the blockchain, continues to recover after the turmoil caused by China in May. The analyst states that the seven-day average hashrate of Bitcoin, which has completely erased the traces of China, was measured at 161 EH / s as of the time of publication, and the all-time high of 168 EH / s is only 7 EH / s estimated.
The hash rate, as well as the mining difficulty, are expected to rise for the eighth consecutive time.
Finally, inflation concerns escalate
Inflation, which is one of the agenda items of macro markets, is expected to be beneficial to Bitcoin and to make it attractive by revealing the protection feature of crypto money. The US consumer price index (CPI) data to be shared this week could further increase the gap between forecasts and reality.
The Fed, which has signaled that its asset purchases will be reduced in the past days, may even be forced to change its strategy due to the current environment, according to an analyst. Mahjabeen Zaman, Citigroup Senior Investment Specialist, comments:
We think there is upside risk to both of the CPI numbers and as a result, the Fed may accelerate asset purchases.
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