Bitcoin (BTC) is back this week One jump brings the largest cryptocurrency in history closer to new all-time highs.
Cointelegraph takes a look at what could move the Bitcoin markets in the coming days when buyers emerge and the $ 16,000 mark lags, at least for now.
Bitcoin cancels Black Friday discounts
The main story among Bitcoiners on Monday is their weekend performance.
After a low of $ 16,300 last week and not much more than $ 17,000 in the following days Bitcoin was stunned on Saturday and started a rally that hit $ 18,600 on November 30th.
The time led to comparisons with Black Friday, as BTC / USD fell in time for the infamous discount day and then rose again.
“”I think the Black Friday Bitcoin sale has officially ended. I hope they have been delivered, “he summarized Barry Silbert, CEO of wealth management giant Grayscale.
At a level of $ 18,550, Bitcoin is up nearly 14% from its lows and has made up most of its losses from the $ 19,500 fall. This will be a familiar sight for traders who will now see the potential of Bitcoin to avoid the psychological selling pressure that was so well near its all-time high of $ 20,000.
“The critical level to maintain is around $ 17,700 to $ 17,850. If it loses, we’ll likely see 16 again.” said Cointelegraph Markets analyst Michaël van de Poppe in his final analysis Sunday.
Van de Poppe also highlighted the $ 18,500 and $ 18,700 area as the key point to keep going up. As a result, Bitcoin hit the middle of this range but has so far failed to make it a “launch pad” for restoring the upper levels.
However, If current levels persist, Bitcoin will easily see its biggest month-end close on late Monday.
$ 1,300 Bitcoin Futures Gap opens lower
One of the main arguments for Bitcoin to withdraw for its next step is the classic “gap” in the futures markets.
Thanks to the volatility of the weekend Monday began with a noticeable “gap” in the Bitcoin CME futures charts, which is USD 1,500 below the current spot price.
Gaps refer to the empty space between the end of Friday trading and the beginning of Monday trading for futures. and the latest opening is $ 1,300, one of the largest ever.
Historical, Bitcoin has chosen to go up or down to “fill in” such gaps as soon as they arise and it has usually done so quickly, which means there is a possibility of a further drop to just $ 16,990 Start of the gap.
Another, albeit much smaller, gap remains “unfilled” from the previous trade of around $ 19,000.
“It all depends on how much we are against this area and how we react to the support at $ 17,000, which is also the weekly close for CME futures.” Van de Poppe commented.
He noticed that too A bullish weekend is not a good starting point to be bullish. Getting into Bitcoin is only a smart move if a support level is reached in a higher timeframe. This means that the CME gap should be fixed by the time the real market situation becomes clearer.
Meanwhile, one survey The follow-up showed a fairly even breakdown among 6,000 respondents on whether BTC / USD would hit $ 14,000 or $ 22,000 first.
Stocks fall after a record month
Outside of Bitcoin, the macro image is inserted at the end of the month. November was 13% global stocks, a record month as expectations for a coronavirus vaccine were high.
Monday, howeverProgress slowed and China turned from profit to loss and European futures followed.
The US dollar, already under pressure, is likely to hit its lowest level since April 2018, Bloomberg reported on the day. As Cointelegraph noted, the US Dollar Index (DXY) has been falling steadily over the past few weeks, undoing some previous gains.
Bitcoin usually responds positively to DXY weakness. And while the relationship with macro-assets is generally diminishing, the abrupt moves in the index can determine the direction of the market in the short term.
At the time of this writing The DXY hit 91.72 after surpassing the 92 support level that existed even in August when Bitcoin hit $ 12,000 for the first time this year.
Meanwhile, virus-related headaches persist across the western world. The UK economy is shared by the market commentator, according to Bloomberg estimates Holger Zschaepitzit will maximally shrink in more than 300 years.
Market-specific topics such as Tesla’s SP 500 debut, they’re on the radar too.
“Extreme greed” is what is in abundance
“Extreme greed” characterizes investor sentiment in both cryptocurrencies and traditional markets, according to the classic indicator of the Cryptocurrency Index of Fear and Greed.
A popular sentiment indicator especially for the cryptocurrency, The index uses a basket of factors to assess how the overbought or oversold market is based on investor behavior. With a normalized value of 100, the higher the reading, the more likely the market will correct itself.
Cointelegraph has been reporting on the Fear and Greed Cryptocurrency Index many times lately as it nears all-time highs of 95/100. A recent high of 94 came just before BTC / USD lost $ 3,000 in one day.
On Monday the index stood at 88, lower than before, but still firmly in the extreme greed category.
But still, For Zschaepitz, the identical rating for “extreme greed” for traditional markets is distorted by the interventions of the central banks as part of the coronavirus measures.
“Just to put things in perspective: CNN’s Fear and Greed Index rose to 92 as investors became extremely greedy“, wrote On Sunday.
“But maybe this greed is mainly driven by CenBank’s liquidity, so it is no longer a reliable indicator of an imminent correction.”
Central banks have been buying a variety of defective assets since March this year to create the illusion of competition in the market. A move that has been heavily criticized by Bitcoin circles.
Do you leave it to professional buyers?
Like the quantum analyst Plan B confirmed in a timely reminder on Sunday, uA new week means another round of buying Bitcoin by a group of familiar faces: Grayscale, Square, and PayPal.
Like last week The corporate giants need to satisfy customer demand by buying the decreasing number of coins available at current prices.
This new status quo, created by PayPal’s introduction of cryptocurrency options, has resulted in estimates that simply prove it There isn’t enough bitcoin for everyone. The needs of all three companies are greater than the miners can produce, but they are still competing with demand elsewhere.
The only logical outcome, in the event that demand increases or stays the same, is that the price of Bitcoin in other assets increases, a simple supply and demand equation.
In an interview with CNBC last week Dan Schulman, CEO of PayPal, said the company is betting that Bitcoin will become more widely used as a currency.
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