As someone who has been closely following the cryptocurrency market for several years now, I must say that the current state of affairs is nothing short of fascinating. The rise of Bitcoin to over $100,000 is a testament to the power of technology and the relentless pursuit of financial freedom by individuals worldwide.
Bitcoin (BTC) seals another record weekly close as a fresh BTC price dip survives just hours before being bought up.
- A trip to $95,800 for BTC/USD sparks huge liquidations as traders get risky in a low-liquidity weekend environment.
- $100,000 is tantalizingly out of reach, but some question how important the level really is.
- Thanksgiving week may be short, but there is no shortage of United States macroeconomic data volatility to be had.
- Bitcoin profit-taking is surging, and long-term holders are exhibiting classic bull market behavior.
- Can the Bitcoin ETFs continue to balance sell-side pressure on the back of a record week’s inflows?
Bitcoin shorts suffer in sub-$96,000 BTC price dip
Following a quick, unexpected drop just before the end of the week, the Bitcoin price surged robustly and currently stands above $98,000, as reported by CryptoMoon Markets Pro and TradingView.
Investors are intensely watching the struggle to surpass the $100,000 milestone for the initial time, with buy-sell activity gradually increasing.
As a crypto investor, I can’t help but feel the adrenaline pumping as the game becomes more daring with each trade. The recent cross-crypto liquidations totaling an astounding $500 million during the dip serve as a stark reminder of this heightened risk, pushing BTC/USD to a new high of $95,800.
In simpler terms, “Skew, a well-known trader, suggested in his recent analysis on X, that it’s possible a passive investor could have been responsible for the dip seen on Sunday.
“$98.5K will be a key price to reclaim.”
According to trader Daan Crypto Trades, there’s currently a significant gap in the Bitcoin futures market operated by the CME Group, which is approaching the upper limit of its historical range. This could indicate a possible basis for additional market recovery.
He forecasted that, given the current price level of over $99K, which coincides with record highs, a full closure might occur shortly since the price seems very near.
Considering the broader perspective, the market conditions, as indicated by data from Hyblock Capital shared by prominent trader CrypNuevo, might still incline towards a potential drop below $90,000.
Looking at the 7-day liquidation heatmap, it’s clear that there are two key areas highlighted in the graph: around $100,600 and approximately $88,500, as noted by him.
“It could be a clue that $88.5k is showing more liquidity than the upside level. So, in principle, should give slighly higher chances/priority to this zone.”
Previously, our report at CryptoMoon highlighted an estimated year-end Bitcoin price of approximately $127,000 based on data from prediction markets.
However, the first hurdle for bulls is the upcoming November monthly close.
What’s in a $100,000 BTC price tag?
At $98,000, Bitcoin easily sealed the highest weekly close in history on Nov. 24.
The data from CoinGlass indicates that the performance of BTC/USD in November is on track to be the strongest it has been in the past five years, with a gain of 54.5% so far in Q4.
Despite this, bulls have been unable to breach the key $100,000 line, which has led some to ready BTC price correction targets.
Crypto Fella, a well-known trader, informed his X followers that Bitcoin has once again made a significant weekly increase, reaching a point where the $100k figure holds great psychological significance for numerous institutions and traders.
“Don’t be surprised if we see a correction in the coming period. In fact it would be healthy for the overall market sentiment.”
To some individuals, the figure of $100,000 carries minimal significance, since it’s never been reached by Bitcoin before, making it just a series of numbers on a digital display to them.
According to Aksel Kibar, “100,000 isn’t a significant level for technical or psychological reasons,” he stated over the weekend.
“But for some it might be a nice level to post memes and celebrate.”
Kibar posted a graph highlighting substantial Bitcoin peak points, with the next critical threshold approaching around $140,000.
Another post queried Bitcoiners’ “obsession” with the six-figure BTC price tag, Kibar then contrasting it with when gold first passed $1,000.
Meanwhile, CoinGlass indicates an accumulation of ask liquidity near the $100,000 mark, as the price approaches a significant liquidation point at $98,750.
PCE data headlines Thanksgiving macro week
Despite it being Thanksgiving week, there’s still a lot of uncertainty surrounding U.S. economic data that could potentially cause fluctuations in the crypto market and other risky investments.
The proceedings kick off on November 26th, starting with the records from the Federal Reserve’s November meeting. During this gathering, they opted to reduce interest rates by an additional 0.25%.
The following day, we’ll see the publication of the Federal Reserve’s preferred measure of inflation, known as the Personal Consumption Expenditures (PCE) Index, together with jobless statistics.
Revised Q3 GDP numbers top off an important two days for risk-asset traders before the Thanksgiving holiday.
According to CryptoMoon’s latest updates, everyone is eagerly watching the Federal Reserve to gather insights about upcoming decisions regarding their policies, as we face a potential “stagflation” scenario – a combination of rising inflation rates and increasing joblessness.
As such, markets are unsure of what the next meeting on Dec. 18 will bring.
The latest PCE inflation figures are significant because they’ve reduced the likelihood of an interest rate reduction in December, according to The Kobeissi Letter.
According to the most recent information from CME Group’s FedWatch Tool, there is now approximately a 56% likelihood of another 0.25% reduction in interest rates, which was previously estimated at around 75%. This means that the possibility of a rate decrease has decreased over the past month.
Just two months ago, the Federal Reserve Chair announced they aren’t rushing to lower interest rates, despite having made a 50 basis point reduction for the first time since 2008 when they started cuts. Core Consumer Price Index (CPI) inflation has been steadily increasing and is now above 3% for the past 43 months, as stated by Kobeissi in another post this weekend.
“The Fed is backtracking again.”
Profit-taking season hits Bitcoin
Long-term Bitcoin holders (LTH) are finding it harder to resist cashing out when the prices surpass the initial investment costs significantly.
According to the most recent information from the on-chain analysis platform, CryptoQuant, those holding steadfastly (“diamond hands”) are regularly cashing in substantial gains every day.
On Nov. 22, as CryptoMoon reported, aggregate realized profits hit a new record of $443 million.
The profit that hasn’t been realized yet is high, standing at approximately 57%, according to analyst Maartunn, who provided the data on platform X.
Selling naturally does not only involve investors who are used to sitting on their hands. Short-term holders (STHs) — those holding for 155 days or less — are also active.
Examining the Spent Output Profit Ratio (SOPR) indicator specifically for the group of miners known as STH, fellow researcher at CryptoQuant, Avocado_onchain, cautioned that this pattern might impact Bitcoin’s market movement.
In the past, when the Short-Term SOPR (Relative Strength Index for Spending Output Profit Ratio) is smoothed using a 30-day moving average, it’s been observed that during bullish market conditions, the short-term SOPR often rises to approximately 1.02 before profit-taking happens. Every time this level has been hit, Bitcoin’s price has seen a temporary decrease or adjustment.
“Currently, the 30-day moving average of the Short-Term SOPR has reached 1.02, suggesting that Bitcoin’s price, while close to $100,000, could face a short-term correction.”
ETFs face big expectations after record week
Similarly to others, CryptoQuant proposed that large investments might offset substantial selling pressure, effectively neutralizing it.
Over the last two months, most of these developments have originated from established institutions, coinciding with the U.S. spot Bitcoin ETFs setting new records.
Yet, should capital flows persist in the market and investors maintain their appetite for buying Bitcoin, there’s a possibility that this previous trend might be disregarded, potentially resulting in a robust surge past the $100,000 mark, according to Avocado_onchain.
According to recent information from sources like Farside Investors, a UK-based investment firm, there has been significant enthusiasm for U.S. Exchange-Traded Funds (ETFs). Over the course of five trading days ending on Nov. 22, these funds experienced total net inflows amounting to $3.35 billion – the highest weekly inflow recorded so far.
According to Rafael Schultze-Kraft, the founder of Glassnode Analytics, November is looking set to break records for Bitcoin ETF investments, with approximately $7 billion already flowing in and only a week left before the end of the month. If current trends continue, this could surpass the $6 billion recorded in February.
“Notably, we’ve only seen a single negative month since inception (April, -$1B).”
Previously, Glassnode had suggested that Bitcoin Exchange-Traded Funds (ETFs) might outpace Long-Term Holder (LTH) selling as the price of Bitcoin keeps increasing.
When Bitcoin surpassed $75,600, all the Bitcoins (14 million) held by long-term investors shifted into a profitable position, sparking increased spending. This has caused a decrease in Bitcoin’s balance of approximately 200,000 coins since the record high was exceeded, according to the most recent issue of their weekly newsletter, ‘The Week Onchain,’ published on November 20.
“This is a classic and repeating pattern, where long-term holders begin taking profits whenever price action is strong, and demand is sufficient to absorb it. With a significant amount of Bitcoin still under LTH ownership, it is likely that many LTHs are waiting for higher prices before releasing more coins back into liquid circulation.”
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2024-11-25 13:27