Bitcoin (BTC) started the first week of 2023 at an undisclosed locationBecause volatility stays away along with traders.
After not running during the Christmas and New Year holidays, BTC price action remains locked in a tight range,
After sealing annual losses of around 65% in 2022, Bitcoin has arguably experienced a classic bear market year, but few are actively predicting a recovery this time around.,
The situation is complicated for the average hodlerCourtesy of the US Federal Reserve looking at macro triggers and the impact of economic policy on dollar strength.
Ahead of Wall Street’s return on January 3, Cointelegraph takes a look at the factors at play when it comes to BTC price performance in the week ahead and beyond.,
Bitcoin Traders Fear New Lows Amid Flat Price
Bitcoin traders may be craving the volatility, but so far, BTC price action has clearly remained stoic.That’s according to data from Cointelegraph Markets Pro and TradingView.
it seems that nothingEven low-volume holiday trading, quarterly and annual candle closes, not preceded by macro data printouts, can change the status quo.
As Cointelegraph reported, According to the Bitcoin Historical Volatility (BVOL) Index, bitcoin’s volatility managed to reach new all-time lows in the run-up to the end of the year.,
Looking ahead, traders remain conservative on what lies ahead for the BTC/USD pairSince signs of a fundamental change in market behavior are completely absent.
“It takes a little pump at the resistance to get everyone excited again, This bull trap is going on till 2022, still people don’t learn.” plot Crypto’s Il Capo on the Day:
“It is very likely that it will reach USD 12,000.”
His comments coincided with a modest rise for bitcoin, which broke above $16,700 for the first time in several days.,
popular trader and analyst Pentoshi echoed her words, pointing out Similarly $12,000 reemerged as a key support area for bitcoin in terms of volume on the longer time frames.,
your analyst partner Meanwhile, Tony returned to Guinea. to bet at least Between USD 11,000 and 14,000 for the BTC/USD pair,
“I expect all these levels to be reached in 2-3 months,” confirmed the comment on Twitter on January 1.,
Michael Burry warns that inflation will return
There is one more week left until the US Consumer Price Index (CPI) for December comes to print. Early January Has Been Relatively Quiet When It Comes To BTC Price Macro Catalysts,
However, this does not mean that there is nothing to pay attention to. Purchasing Managers’ Index (PMI) and nonfarm payrolls data are expected next week,
The short- and medium-term trend is one of low inflation, according to CME Group’s Fedwatch tool.Which in turn leaves the riskier assets room for maneuver.
The Federal Reserve has not yet indicated that it is going to hike its interest rates.This is despite the fact that the rate of these increases has started declining. As soon as these signals occur, risk sentiment should clearly strengthen.,
The Federal Reserve will publish the minutes of its Federal Open Market Committee (FOMC) meeting on January 4.In which it will provide clear guidelines on the policy to be followed.
Although, For “big short” investor Michael Berry, even the more forgiving scenario isn’t the end of the inflation story.,
“Inflation has peaked. But this is not the last peak of the cycle,” warning in a row On January 2:
“We are likely to see a lower, possibly negative CPI in the second half of 2023, and the US is in recession by any definition. The Fed will cut and the government will encourage. And we’ll have another spike in inflation. It’s not difficult.”
The results of the Fed’s policy are clearly visible in the behavior of the stock markets in 2022, For example, the S&P 500 ended the year 1,000 points below many popular estimates.
As markets await the first Wall Street trading day of 2023, The US Dollar Index is already struggling in what could be the first silver lining of the year for crypto assets.,
The US Dollar Index (DXY) is currently threatening to break through support that has not been challenged for more than six months, after which the 100-mark level is re-entered.,
“Markets: DXY on the verge of breaking again, 10-year yields approach resistance, WTI crude bounces off resistance, gold stalls at resistance, stocks tread water,” Abbreviation calum thomasfounder and head of research at macro research house Top Down Charts, in part of his Twitter comments of the day.
Unleash the Difficulty Amidst Gloomy Hash Rate Data
In the world of bitcoin fundamentals, the year begins as usual,
Bitcoin’s next difficulty adjustment, set for January 3rd, will erase gains made two weeks ago, in a sign that miners are under pressure on BTC price performance.,
After rising 3.27% on Dec 19, the difficulty will drop 3.5% this weekAccording to data from BTC.com, that will not reach new all-time highs.
The difficulty data itself provides an interesting insight into the health of bitcoin “under the hood”; Despite concerns about the financial stability of miners, competition for block grants remains surprisingly high.,
having said that, Data from late December paints a bleak picture for the average network participant; hash rate Estimates of total processing power dedicated to mining reached its lowest level in years,
“This is the most brutal bitcoin miner capitulation since 2016 and possibly ever,” commented then Charles Edwards, Founder of Capriol Investments:
“Hash ribbon capitulation captures lowest bitcoin hash rate reading of 2022 as miners go bankrupt and default under massive pressure from squeezed margins globally.”
The accompanying chart showed the bitcoin hash ribbon indicator entering another “capitulation” zone, in which miners largely shut down the hash rate., A similar incident happened in July 2022 and another a year ago.
As Cointelegraph reported, Public bitcoin mining companies also continue to feel the strain; Core Scientific Receives Nearly $40 Million in Provisional Bankruptcy Debt from Creditors Including BlackRock,
btc proposal falls asleep
Since volatility has been absent from the bitcoin price for weeks, it is There is apparently little enthusiasm to sell among hodlers,
The latest on-chain data supports this theory, as BTC supply is more and more inactive as speculators stay away,
According to On-chain analytics firm Glassnode, The amount of stable supply in your wallet has reached its highest point since January 2018 in the last five to seven years,
This trend continued for most of last year.As in the previous halving cycle those who bought BTC saw their purchase price back.
As the supply ages, the amount of currencies circulating in the short term also decreases, indicating an absence of impulsive speculative trading.,
The amount of BTC supply that was active three to six months ago is now at a five-year low, confirm bluenode. Active offers from three to five years ago are now at a one-year low.
“supply is getting weird again”, answer stockmoney gecko analysis resource For the same waiting period data at the end of the previous month.
The attached chart shows the correlation between passive supply and macro highs and lows for BTC price action.,
the price is neither here nor there
in the same vein Many market participants don’t know how to feel about the future of cryptocurrenciesThe feeling is neither here nor there.
This is a reading from the popular sentiment meter, Crypto Fear and Greed Index Continues to Move Into the Just Above “Extreme Fear” Zone,
A story that is already characteristic of the period after the collapse of FTX, Sentiment is confused about how bad the crypto situation really is,
Of the five emotion categories in the index, only “fear” has leveled off in recent weeks, with the latest foray into “extreme fear” coming in late November.,
As Cointelegraph pointed out in a dedicated guide, The Fear and Greed Index can provide important insight into market activity based on investor behavior., In 2022, it reached a low of 6/100, which is rarely seen in the lifetime of bitcoin.
“Although 2022 was brutal for the crypto space in terms of sentiment, I have never been more excited about the long term of the industry from a fundamentals perspective,” concluded Daniel Cheungco-founder of investment firm Synxy Capital, in a Twitter thread on Jan. 1.
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