With the price at rock bottom and increased difficulty on the network, the miners’ situation is getting worse week by week. Capitalization of the latter may lead to this context but that is not all. Here are 5 things to remember about Bitcoin this week!
Bitcoin in the red!
Bitcoin is once again in the center of attention of the crypto community. As these lines are written, these lines are exchanged $16,200. The asset is more than 20% lost in November, especially suffering due to the fall of FTX.
The full consequences of the exchange’s failure are not yet known. It seems that some companies like Genesis are already having difficulties, but it will be necessary to wait several months for a precise idea of contagion after boxing one of the biggest exchanges in the sector.
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Minors at risk?
Facing this declining market, minors have difficulty themselves. With the price of Bitcoin increasing and increasing difficulty on the network, they have had a very complicated last few months.
Although it may be difficult to assess the extent of the damage, certain indicators seem to indicate that the miners are about to capitulate. This is especially true for hash ribbons, indicator that uses two moving averages Hash Rate (30 and 60 days here). Thanks to the crossings of these two MMs, the steps can be generally identified capitalism and recovery.
The Hash Ribbons indicator (source: See Bitcoin)
For CrypoQuant Kripto Mevisimi analyses, we are approaching capitalization. He explains:
Currently, the difficulty of the Bitcoin network is very high for miners. This means that costs are rising and it is becoming harder for them to be profitable. This is one of the reasons why miners are not working at their full potential. The current environment is difficult for miners.
For the expert, a significant change in the difficulty of mining could bring relief to the miners. According to the BTC.com site and its estimates, the latter could down 6.4% at the next adjustment on December 6. If this estimate is correct, this would be the biggest drop since July 2021.
All the data analysis sites note that a decrease in hash rate. The latter applies to minors who stop their activity temporarily or permanently.
What is the forecast for Bitcoin price?
The IS weekly closing of Bitcoin was a little upper until last week. A calm sign for the largest market capitalization that has suffered the blow since the beginning of the year. Even worse, BTC is currently in an over two year low.
So far, volatility on BTC is very low. A situation that invites traders to be cautious. All observers will closely follow the monthly close on November 30. Since the beginning of the month, the BTC lost more than 21% of its value. This is the worst November for Bitcoin since 2018 and the previous bearish market as confirmed by CoinGlass.
Worst November for Bitcoin since 20158 (source: Coinglass)
On a shorter time frame, Crypto trader Tony emphasizes the main area of $16,000. For him, this is the next resistance to cross to hopefully seek higher liquidity.
Crypto watchers are all trying to determine the bottom of BTC. A far from easy task. Regarding influence, Il Capo de Crypto, Bitcoin could continue to slide up to $12,000.
Words to pick up with tweezers when you know how to say the character everything and vice versa from one week to the next. In the case of the latter, however, the current context does not lend itself to gains.
A period conducive to accumulation?
This difficult period for the asset price seems to help to accumulate. Whether it’s a small or large account, many indicators are looking at increasing exposure to BTC.
According to Glassnode, individual investors, referred to as crabs and shrimps based on their wallet balance, more and more numerous. Glassnode discusses these figures on Twitter.
Bitcoin Shrimp (unheard of increase in balance. This category of investors now owns more than 1.21M BTC, which is 6.3% of the circulating supply.
The increase in BTC balance of small wallets (source: Glassnode)
Crabs (up to 10 BTC) see also a a sharp increase in their balance with more than 191,600 BTC added in the last 30 days.
Crab wallet balance increase (source: Glassnode)
Bun soon?
Willy Woo, crypto market analyst, signs of things to come on Bitcoin that can be seen. By comparing this cycle with the previous ones, he manages to show that the behavior of Bitcoin is the same during previous market lows.
In particular, he notes that the percentage of BTC held in unrealized loss, approaching macro lows. He explains:
The bottom of Bitcoin is approaching if we look at the Max Pain model. Historically, BTC price reaches macro bottoms when 58 to 61% of signals are lost (area in orange). The green shade here corresponds to BTC locked in a Grayscale GBTC background.
The Max Pain model according to Willy Woo (source: Willy Woo’s Twitter and Glassnode)
The latter also emphasizes the MVRV ratio which is similar to point to bottom for BTC. The coming months will tell us if these opinions are good and fair.
China’s weighing down macroeconomic situation?
On the macroeconomic side, important economic data from the United States is expected this week. However, all eyes seem to be on the China.
In fact, the country is currently in the grip of a wave of protests against the government’s policy on Covid. Many residents are demonstrating in different cities of the country that they demand the end of restrictions and the Zero Covid Policy.
Young people, without masks, call for Xi Jinping to step down.
Fascinating images of Chinese people shouting that they are stuck with zero-Covid, after almost three years of restrictions https://t.co/J4DgULwXYn— Zhifan Liu (@zhifanliu) November 27, 2022
This worrying context observers and could have significant consequences, especially on the risky assets. Michael van de Poppe, founder and CEO of trading company Eight, says:
If BTC support is lost, I expect new levels. These will certainly depend on the situation in China and the contagion linked to FTX.
It’s the next few weeks decisive for Bitcoin. In particular, we will closely monitor macroeconomic news and the state of the miners.
To learn more about the investigation opened by a Bahamian judge into FTX, find our article here.
