Autor Cointelegraph By William Suberg

Bitcoin (BTC) starts a new week facing multiple hurdles but with strong internal support — can old resistance below $50,000 finally fall?A correction event now almost in its third month is frustrating many, but conditions may soon be right for a fresh charge against opportunistic bears, an increasing number of analysts are saying.With inflation running hot and United States lawmakers set to make the Bitcoin mining debate public this week, there are plenty of potential pitfalls in store.Nonetheless, it’s beginning to feel like Bitcoin is at the point where it is capable of producing a classic surprise when the majority of the mainstream economy least expects it.Cointelegraph takes a look at five factors worth paying attention to when charting BTC price action over the coming week.Bitcoin retains key weekly close levelBitcoin looks decidedly uninterested in tackling even local resistance levels as the week begins.After a rangebound weekend with little unique price action, BTC/USD is putting in lower lows on short timeframes while avoiding key zones around $44,000.With Wall Street closed for a holiday, Monday could shape up to offer more of the same before markets provide direction.Bitcoin did, however, manage to close out the week at exactly the crucial point identified by trader and analyst Rekt Capital as useful for aiding bullish momentum.“A Weekly Close above ~$43100 (black) would be a good sign of confirmation for BTC to continue higher from here,” he wrote Sunday alongside an accompanying price chart. “By turning black into support on the Weekly, $BTC would confirm a re-entry into its ~$43100-$51800 range.”BTC/USD annotated chart. Source: Rekt Capital/ TwitterA subsequent dip took the largest cryptocurrency lower, with $42,337 on Bitstamp the local floor for Monday at the time of writing.Also cautiously optimistic is fellow popular trader Crypto Ed, who is eyeing a potential replay of last week’s run above $44,000, something that bears subsequently quashed.”Although it’s early but this looks like the start of continuation of last weeks move. Fingers crossed!” he summarized in part of his latest Twitter update.Last week, meanwhile, Cointelegraph reported on sentiment favoring an upside breakout as an eventual outcome of the current ranging behavior.Congress to discuss “cleaning up” crypto miningThe “stage is being set” in more ways than one this week as the topic of inflation returns to haunt U.S. markets and politics alike.Amid a fresh flurry of headlines about how inflation is hitting consumers, the highest consumer price index (CPI) print in 40 years is already hitting President Joe Biden’s approval ratings.Reining in the 7% year-on-year CPI increase could see the Federal Reserve enact no fewer than four key rate hikes in 2022 alone, Goldman Sachs forecast last week. This in turn places more pressure on weary consumers.“The stage is being set in the coming weeks,” Pentoshi argued.Closer to home, this week will see U.S. lawmakers discuss the alleged environmental impact of cryptocurrency mining.With a significant chunk of the Bitcoin hash rate now coming from the U.S., any hostile policies will matter more than most when it comes to sentiment. A repeat of the China exodus from May 2021 — and its knock-on effect for hash rate and network security — will not be welcomed by anyone.Hash rate, as Cointelegraph noted, is now back at all-time highs, fully recovered from last year’s events.The Oversight and Investigations Subcommittee hearing is due to take place on Thursday, and is titled “Cleaning Up Cryptocurrency: The Energy Impacts of Blockchains.”The hearing will be livestreamed in real time on the day.Bitcoin “a bonfire covered in gasoline”Bitcoin volatility is plumbing multi-year lows — encouraging for its acceptance as a mainstream asset, but not something many expect to last.According to the Bitcoin Volatility Index, which calculates the standard deviation of daily BTC returns for the last 30 and 60 days, Bitcoin is at its least volatile since November 2020 at 2.63%.Current price movements are thus similar to before BTC/USD entered price discovery after cracking its $20,000 all-time high from 2017.For trader, entrepreneur and investor Bob Loukas, the stage is now set for a potential repeat of those events.“Remember when everyone was loading up BTC options in Sept/Oct for the super cycle. Those are probably down 80+%,” he commented, noting that derivatives traders from before the current $69,000 all-time highs are likely more than disappointed. “Vol dropping speaks to consolidating period, likely similar outcome period leading into Oct 20′ move. But think still time to grind in this BTC range.”Bitcoin Volatility Index chart. Source: Buy Bitcoin WorldwideWhile “exciting” price moves are yet to reappear after December’s drawdown, however, they are now all the more likely thanks to Bitcoin’s supply becoming increasingly inaccessible. “With illiquid supply at ATH’s for this cycle, Bitcoin is essentially a bonfire covered in gasoline,” market commentator Johal Miles argued. “The slightest whiff of demand will bring roaring flames.”As Cointelegraph reported, BTC is being ferreted away into cold storage out of the grip of speculators.Interest “quiet ever since” early 2021Amid questions over the absence of retail investors even after a 40% price drawdown, new data shows that the sector has in fact had little interest in Bitcoin for an entire year.Eyeing new entities appearing on the blockchain, Glassnode analyst TXMC Trades showed just how quiet Bitcoin has really been in terms of retail adoption since January 2021.A look at the 30-day exponential moving average (EMA) of new entities coming on chain reveals that the last major surge ended at the start of Q1 last year.Since then, despite two new all-time price highs, new entity numbers have fallen and returned to standard rates normally seen after bull cycle peaks.“Bitcoin bull/bear markets have a distinct on-chain activity profile,” TXMC explained on Twitter.“…Activity wise, the last bull run ended in January 2021. It’s been quiet ever since.”Bitcoin new entities chart (30-day EMA). Source: TXMC Trades/ TwitterThe data underscores how the average investor has all but forgotten Bitcoin, even as it swept new highs and institutional activity remained strong.Interest levels from Google users adds to the trend, with search rates for “Bitcoin” worldwide at levels previously the norm in December 2020.Worldwide Google search data for “Bitcoin.” Source: Google TrendsMiners, although being far from underwater at current price levels, are also getting less income from transaction fees than at any point since late 2020 — just 1.08%.“This is an indicator that retail is not in yet… Although price is really similar to early 2021 When retail?” Twitter-based on-chain analyst Blockwise queried this weekend, presenting further Glassnode data.Bitcoin miner transaction fee revenue percentage annotated chart (7-day MA). Source: Blockwise/ TwitterBe afraid, be “extremely” afraidBitcoin’s new year “extreme fear” continues — and if on-chain behavior is anything to go by, it’s set to remain the dominant sentiment force.Related: Top 5 cryptocurrencies to watch this week: BTC, NEAR, ATOM, FTM, FTTAccording to the Crypto Fear & Greed Index, which measures market sentiment via a basket of factors to assess just how traders are likely to act at a given price point, things have rarely looked more bleak.Since late December, the Index has characterized the status quo as “extreme fear,” and so far, no price shifts have managed to alter it.The same is true this week, with Fear & Greed at 21/100 — well within the “extreme fear” bracket.Crypto Fear & Greed Index. Source: Alternative.meSimilarly, data covering BTC moved at a profit or loss shows timidity among transactors, with precious little profiteering to be seen. Such behavior is common during price dips and was seen last year during the summer as BTC/USD fell and bottomed at around $30,000.Bitcoin realized profit/ loss ratio annotated chart. Source: On-Chain College/ Twitter“This is the real Fear & Greed Index,” popular Twitter account On-Chain College commented, uploading the data, which comes from Glassnode’s realized profit/ loss ratio indicator.

The Bitcoin (BTC) mining business is bigger than ever at current price levels, and new data shows just how unlikely a mass miner sell-off really is.As noted by popular Twitter account @venturefounder on Jan. 14, even at $42,000, the BTC/USD trading pair is around 20% above miners’ cost price.Miner capitulation behind “worst” BTC price dipsDespite falling a full $27,000 below all-time highs, BTC is more enticing than ever for miners. Hash rate, an estimate of the total processing power dedicated to mining, reached new all-time highs this week.Those concerned that a fresh BTC price dip could pressure miners into selling, meanwhile, received fresh assurances via data covering how much BTC/USD should trade at for them to break even.Referencing the BTC production cost indicator from Charles Edwards, CEO of asset manager Capriole, venturefounder revealed that the breakeven point currently stands at $34,000.”The worst dumps Bitcoin ever had were due to miners capitulation (December 2018, March 2020), when BTC fell below production costs, it is at risk for miner capitulation,” he added in comments. “BTC was at risk for miner capitulation at $30k in May. The current production cost is $34k, 20% below current price.”Bitcoin production cost annotated chart (screenshot). Source: @venturefounder/TwitterAs such, there is no reason for miners to sell thanks to the profitability — as well as future perspective — of their operations.In a Medium post about his indicator from 2019, Edwards additionally noted that transaction fees awarded to miners give them an additional cushion against spot price incursions below production cost.”Historically, the electrical cost to produce a Bitcoin has represented a price floor in the Bitcoin market price,” another insight reads.Mining shrugs off spot price moves this yearAs Cointelegraph reported, miners are indeed voting with their wallets as BTC consolidates below $50,000.Related: Bitcoin cycle is far from over and miners are in it for the long haul: Fidelity reportRather than selling, miners en masse have been accumulating BTC more this month and last than during the highs.This speaks both to a healthy balance sheet and resolve over the future — fears of economic difficulties on the horizon are not currently weighing on the mining sector.Bitcoin hash rate chart. Source: BlockchainGoing forward, current worst-case scenario estimates among well-known analysts foresee a BTC price floor no lower than $30,000.

Bitcoin (BTC) returned closer to $40,000 on Thursday as $44,000 resistance proved too much for bulls to overcome.BTC/USD 1-hour candle chart (Bitstamp). Source: TradingViewBuying another dipData from Cointelegraph Markets Pro and TradingView showed BTC/USD shedding around 4% in 24 hours Friday.The pair had topped $44,450 on Bitstamp before the retracement kicked in, this seeing local lows of $41,780.While disappointing for those hoping that the worst of the pullback was over, analysts appeared unsurprised by the move, which they said could resolve via a fresh test of $40,000 support.Pretty much the path for #Bitcoin. pic.twitter.com/VY0BkTXYOM— Michaël van de Poppe (@CryptoMichNL) January 14, 2022Popular trader Pentoshi also appeared to get his wish, BTC “sweeping” lows below $42,000 in what he had previously identified as a prime opportunity for entry. $46,000, he added, could be next.Looming large, however, was another “death cross” chart construction on BTC/USD, a classic signal warning of bearish conditions.As Cointelegraph previously reported, a death cross occurs when the declining 50-day moving average crosses under the 200-day moving average. The feature is somewhat rare but has not always resulted in bearish behavior thereafter.BTC/USD 1-day candle chart (Bitstamp) with 50-day, 200-day moving averages. Source: TradingViewUpside conclusion still on the cardsLooking ahead, analysts at trading suite Decentrader remained bullish on mid-term price action, acknowledging that another dip into the $30,000-$40,000 range may yet occur.Related: Top or bottom? Traders at odds over whether Bitcoin will keep risingThe two-month downtrend from early December was ripe for disruption, they argued in a market update issued Friday, and the upside was “likely” over a cascade lower.”It is our view that we may need to see some further ranging between $44,000 and potentially $38,000 before an eventual breakout. This ranging is likely to cause more pain and misery for any traders who try to impatiently front-run major moves before they are ready,” the update summarized. Encouraging, Decentrader added, was funding rates slowly becoming more consistently negative as sentiment finally flipped to expecting further downside — healthy conditions for a squeeze to the upside.”Given the current fundamentals of Bitcoin and the size and consistency of the downtrend over the past 2 months, we do believe that a move out of the range to the upside is the most probable outcome eventually.”BTC funding rates chart. Source: Coinglass

Bitcoin (BTC) fell more than 2% from local highs during Jan. 13 in the latest move to keep market participants guessing about what’s to come for the largest digital asset. BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView“One step at a time”Data from Cointelegraph Markets Pro and TradingView tracked the pullback for BTC/USD after the pair hit its highest levels in more than a week.A trip to $44,450 on Bitstamp after the Wall Street open was followed by an hourly candle that at one point sparked losses of $1,500.A fresh sign that rangebound activity remains the order of the day for Bitcoin, bulls were disappointed after multiple calls for a fairly easy squeeze toward $46,000.For popular trader and analyst Scott Melker, “There was still no clear sign of direction.”“Still just chopping sideways,” he told Twitter followers on the day, noting that Bitcoin had swept lows with its sub-$40,000 dive earlier in the week, which was also in line with his own predictions.Fellow Twitter account Daan Crypto Trades further highlighted $45,700 as an upside target important for a resistance/support flip.“The $45.7K level is the next area of interest that’s on my radar. It will be key to flip that level for the bulls,” he wrote. “BTC looks great on LTF but still has a lot of work to do on HTF to call this a proper reversal. One step at a time.”Others were more hopeful of a paradigm shift coming in the mid-term.“Over the coming days and weeks, BTC may reveal a new market structure in which case it would be well worth paying close attention to it,” trader and analyst Rekt Capital forecast.Related: Traders say Bitcoin run to $44K may be a relief bounce, citing a repeat of December’s ‘nuke’Options traders come under the spotlightNew research also suggested the reason that $40,000 was short-lived as a dip and $44,000 conversely became an area of resistance afterward.According to crypto trading firm QCP Capital, the determining factor lies in options markets, which have now become significant enough to have a “material impact” on BTC price action.“For instance, one key reason for the lack of follow through in BTC and Ether below $40,000 and $3,000 is possibly the few large players owning strikes around those levels,” a Telegram update explained. “They naturally create support as they bid for spots to trade the delta there. And when they take profit on those option positions, the upside impact on the market is very clear as well.”“Additionally, a sharp options player who had bought 42,000 January calls started taking profit on those around the $44,000 spot level, naturally creating some resistance there.”Options open interest remains far from 2021’s all-time highs, data from Coinglass shows.Bitcoin options open interest chart. Source: Coinglass

Bitcoin (BTC) touched $44,000 a second time on Jan. 12 amid increasing divergence of opinion about whether the price bottom is “in.” BTC/USD 1-hour candle chart (Bitstamp). Source: TradingViewData from Cointelegraph Markets Pro and TradingView showed the $44,000 mark acting as local resistance Thursday, following forecasts that $46,000 could soon return.Bitcoin stayed broadly higher overnight following the previous day’s United States inflation data, but for some, now was not the time to become overly confident.“BTC starting to feel a little toppy (local), although asks are diffused through some key resistance levels,” Twitter account Material Indicators commented as part of a recent update. “Some bitcoin bulls may show up to clear a few levels, but the whole herd is going to have to show up to clear them all.” Suggesting a good opportunity to “de-risk,” Material Indicators highlighted order book flux, which, on Wednesday, had formed the focus of a graver warning about a possible incoming crash.By contrast, others believed that a price “squeeze” may ultimately be to the upside and punish latecomer short traders.Observing perp funding going increasingly negative as price grinds higher, it appears that the real liquidation wave may be on the upside https://t.co/ml8h5t0Skg— Zhu Su (@zhusu) January 12, 2022Popular trader Crypto Ed, meanwhile, began to show optimism over significantly lower levels being gone for good.Having uploaded a predictive chart snapshot, he argued that should BTC/USD grind higher on the day, the stage would be set for a higher low construction as part of a more solid recovery.Good Morning all! Tnx for giving me some time to have a twitter break, but I’m back to tell you that my feeling about “bottom is in” is getting stronger when seeing the #BTC chart. Want to see more confirmation, but if we do get that 5th leg today, I’m getting excited! pic.twitter.com/yW07BSdrYC— Crypto_Ed_NL (@Crypto_Ed_NL) January 13, 2022

How long can the relief last?A brief look at funding rates across exchanges revealed only a slight change overnight, with neutral to negative values dominating. Related: Traders say Bitcoin run to $44K may be a relief bounce, citing a repeat of December’s ‘nuke’Such behavior runs in contrast to recent weeks, in which a declining spot price was met by positive funding.Bitcoin funding rates chart. Source: CoinglassAt the time of writing, BTC/USD continued to attempt a breakout of the $44,000 zone, buyers preventing each drawdown.