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5 things you should know this week

August 17, 2020

Bitcoin (BTC) is starting a new week at the high end of its new price range near $ 12,000. Will the market finally break above levels this week?

Cointelegraph take a look Five things to consider in order to know where Bitcoin is headed in the coming days.

The SP 500 is approaching its all-time high again

In contrast to the previous weeks Macro markets and their impact on Bitcoin are back in the spotlight on Monday.

5 things you should know this week5 things you should know this week

China leads the way, with stocks rising to near their highest level in two years after news that the People’s Bank of China (PBoC) plans to ease monetary policy.

The Shanghai Composite Index rose 2.3% that dayThis year, the growth was 13% despite the upheaval of the coronavirus.

On the other hand, The SP 500 is already up more than 50% from its March lows, and Goldman Sachs analysts revised their year-end forecasts. The goal is now 3,600 points, not 3,000, a new record.

Also at the time of publication, The index was just 14 points away from all-time highs it had seen in February before the coronavirus outbreak.

Bitcoin Vs. SP 500 1 year chart

Bitcoin chart versus 1-year SP 500.Source: Skew

“As the last few months have shown, Stock prices depend not only on the future stream of expected profits, but also on the discount rate of those profits at present value“Bloomberg quoted Goldman’s David Kostin in a note on Friday.

“Look into the future, A falling equity risk premium will outweigh rising bond yields and, combined with our above-consensus EPS forecast, will raise the SP 500 index to 3,600 by the end of the year. “

The actions before exerted a significant impact on Bitcoin, with the SP 500 correlation already at 95%.. As Cointelegraph reported in recent weeks, despite the gold acquisition, Analysts continue to believe that a drastic change in stocks would also be reflected in Bitcoin, given the recent correlation with all-time highs..

Bitcoin Gold Correlation

Correlation of Bitcoin with Gold. Source: Skew

Bitcoin’s correlation with gold has declined as the latter lost its $ 2,000 support level from 68% to 48% in August, according to the data.

Bitcoin vs. Gold 1 year chart

Bitcoin vs. Gold 1 year chart. Source: Skew

Analyst: Bitcoin could drop $ 12,000

Regarding Bitcoin, Market sentiment faces its own obstacle.

$ 12,000, a value it has looped through multiple times in the past two weeks but hasn’t turned into support, continues to cause problems for traders. Recent price moves have underscored the fact that $ 12,000 does not appear to be conquering resistance..

“”We are still on an upward trendso I should lean on the bullish side, “filbfilb, the analyst at Cointelegraph Markets, said on his Telegram channel on Aug. 13. Also keep in mind that altcoins will rise as the price of BTC maintains a bullish markespecially after “price movements showed a strong recovery in demand,” he said.

Meanwhile, his analyst over the weekend Michaël van de Poppe suggested that the USD 12,000 sell off was strong enough to trigger a bigger pullback for BTC / USD. A jump from the $ 10,500 support level was “very likely”, he argued, before the troops appeared to climb higher and eventually turned the $ 12,000 level into support.

“Given the importance of this level, I’m starting to think that it is going to be a very likely scenario“Van de Poppe told his followers about Twitter.

“However, a clear breakout and change in resistance to support at $ 12,000 continues towards $ 13,000 and possibly between $ 15,000 and $ 17,000.”

BTC / USD price chart with possible backtracking and reversing of USD 10,500

The BTC / USD price chart shows a possible decline towards USD 10,500. Source: Michaël van de Poppe / Twitter

Bitcoin returned to trading within a corridor in August after taking $ 10,500 and $ 11,000 in sharp movesthat amazed market participants with its speed and durability.

Above USD 12,000, BTC / USD stands little in the way of resistance until the zone hovers at its all-time high of $ 20,000 around 2017.

The highest hash rate ever precedes the difficulty level

Beyond the price features, Bitcoin looks stronger under the hood than ever before.

Monday, The hash rate of the Bitcoin network reached its all-time high of 129 exahashes per second (EH / s)..

The hash rate refers to all of the computing power miners put into validating the blockchain and processing transactions.

The metric is more of an estimate than a hard and fast measurement with all-time highs relative to the 7-day average hash rate.

The miners’ behavior changes and affects the estimate and therefore the hash rate fluctuates. Last week there were further concerns after a mining pool suddenly sent 800 BTC to the Binance exchange, possibly ahead of a sale.

The hash rate refers to all of the computing power miners put into validating the blockchain and processing transactions.

The metric is more of an estimate than a hard and fast measurement with all-time highs relative to the 7-day average hash rate.

The miners’ behavior changes and affects the estimate and therefore the hash rate fluctuates. Last week there were further concerns after a mining pool suddenly sent 800 BTC to the Binance exchange, possibly ahead of a sale.

However, The latest figures show that the miners’ mood is still strong. The network troubles, arguably the single most important signal in determining the immediate health of Bitcoin, are expected to increase over the next six days. That will also lead to a new all-time high.

As Cointelegraph reported, One popular theory suggests that continued strength in the fundamentals of the network will later trigger a price spike.

Average 7-day hash rate of Bitcoin

The average bitcoin hash rate of 7 days. Source: Blockchain

“Extreme greed” can trigger a correction

One factor, or rather a basket of them, triggers a warning this week.

The Fear and Greed Indexusing multiple sources to compute an impression of investor sentiment, continues to raise the alarm about excessive “greed” of the owners.

Monday, At 84/100, the index was just three points below its all-time high of 87 since June 2019.

Derived from the Fear and Greed Index for Traditional Markets, The metric is intended to indicate when bullish or bearish volatility can occur.

Specifically, The highest zone the index is currently in represents a significant change that the market “needs to correct”..

At the end of March, however, the index reached lows of 8/100as investors were “too concerned” about Bitcoin’s strength after the cross asset decline two weeks earlier.

Crypto Fear  Greed Index as of August 17, 2020

The Fear and Greed Index from August 17, 2020. Source: Alternative.me

Quant Analyst is targeting a monthly closing price of $ 14,000

As so often Looking at the bigger picture is a much stronger argument for the buyer.

The quantum analyst PlanB is responsible for this week’s outlook, whose model for forecasting the share price is back in the spotlight.

In exactly one year in particular, the model will ask for a BTC / USD price of USD 100,000. In the meantime, PlanB records the monthly closing value of Bitcoin Since halving in May, a next target price of $ 14,000 has been reached, with the aim of beating the highest monthly closing price in history as of December 2017.

Bitcoin S2F cross-asset model diagram

Bitcoin S2F Cross Asset Model Diagram. Source: PlanB / Twitter

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