Bitcoin (BTC) starts a new week as traders continue to digest the latter’s impact – a sharp drop in prices that was once $ 41,900.
The modest recovery is now competing with massive resistance, the first of which is $ 50,000.
Given the sense of déjà vu that permeates the markets, analysts agree that the end of the fourth quarter of 2021 is unlikely to lead to the explosive peak they expected.
There is also concern that another deeper price cap for BTC must be introduced before a real recovery takes place.
What may have happened in the last weeks of the year? Cointelegraph will look at five factors that everyone can see next week.
Do you think the first quarter of 2022 will be “optimistic”?
After approaching $ 50,000 earlier this week, BTC / USD is now back at $ 48,000, still down 16% during the week.
Against the all-time highs of $ 69,000, Friday’s maximum loss is 39% so far – significant, but by no means record high for Bitcoin.
With falling price expectations, attention is now focused on the rise in 2022.
“No matter what the cost, my base case is that we consolidate / expand EOY and set up a mixed negative financing rate / premium system until a bullish first quarter,” predicted William Clemente in a Twitter discussion.
1-hour candlestick chart BTC / USD (bit stamp). Source: TradingView
The focus will be on the sustainability of recovery in the derivatives markets after a number of liquidations.
Friday’s events managed to “dump” open interest in bitcoin futures to levels last seen in September, to price levels similar to the mine’s downturn.
Open interest rate charts for Bitcoin Futures. Source: Coinglass
New KPI data, new problems with inflation
The macro markets are already on the brink, but this week it may provide some familiar fuel for the fire in the form of new data for the consumer price index (CPI).
US CPI data come in November and are even expected to exceed the 6.2% y / y shock in October.
The economists’ prospects were noted by Lyn Alden, financial columnist and founder of Lyn Alden Investment Strategy. She added that the lagging housing index is not the same as last month and is likely to be a factor in the results.
Inflation made headlines again last week after central bank governor Jerome Powell seemed to suggest that “transition” no longer fits that description.
Bitcoin reacted immediately and bulls will eagerly await new CPI data, hoping for a response similar to what was seen in October.
Cryptocurrency, despite its recent volatility, is considered the best possible option for protecting purchasing power, not least because inflation is actually much higher when assets that are not covered by the CPI are taken into account.
“Everyone has double-digit inflation if they scale it properly and need bitcoin more than they think,” warned Michael Sailor, CEO of MicroStrategy and a prominent CPI critic in bitcoin circles late last month.
Meanwhile, the printing of money by the central bank, especially the Federal Reserve, has drawn public criticism from the head of another sovereign state.
“Can you stop printing more money? You just want to make matters worse, “said Neb Bukele, president of El Salvador, in a” temporary “letter to Powell.
“So true. This is a no brainer.”
Look at the hole Look at the hole!
Michael van de Poppe, a Cointelegraph contributor, said Bitcoin will face a “giant” future gap this week – so large that it may not close immediately, but traders should not forget that.
With derivatives trading escalating bearish pressure over the weekend, futures contracts can still be a measure of positive momentum.
CME futures closed Friday at $ 53,545- $ 5,000 above spot prices at the time of writing.
In keeping with tradition, the BTC / USD can rally to “close” this gap, paving the way for a recovery of at least $ 50,000 and possibly even maintaining the market value of trillions of dollars.
Van de Poppe predicted on Sunday that “later today there will be a large gap in CME of up to 53.5 thousand dollars.”
“Often, as in 99% of cases, they close at some point. At least an important level to watch out for in the coming weeks if the market continues to jump for bitcoins.”