Bitcoin (BTC) is simply refusing to make a loss this week, as a dip below $ 60,000 barely lasts an hour and bearish momentum burns away once again.
After a fairly uneventful weekend, Sunday saw a typical decline before a spectacular resurgence in the BTC / USD pair took place just an hour later.
With that, Bitcoin price has not only preserved its bullish trajectory, but has also sealed its highest weekly close in history, around $ 61,500.
As the market prepares for the possible start of trading in the first Bitcoin exchange-traded funds (ETFs) in the United States, volatility is almost guaranteed.analysts say.
Cointelegraph take a look at Five things to keep in mind in the week that the BTC / USD pair squares to all-time highs and institutional access takes a historic leap.
Bitcoin gives less than an hour to “buy during the dip”
When it seemed that the race to the all-time highs had hit a stone, Bitcoin surprised everyone again overnight.
After losing $ 60,000 late on Sunday, the bullish momentum had no time for BTC price weakness, and before the BTC / USD pair hit $ 59,000, it embarked on an aggressive buying spree.
Hours later, the pair was back above not just $ 60,000, but $ 62,000., and it has remained there at the time of writing.
The episode did not even affect the weekly closing de Bitcoin, which despite volatility remained the highest ever: around $ 61,500.
“The historic close of the week now means that BTC is well positioned to keep rising”, summarized on Monday the trader and analyst Rekt Capital.
Added that the next phase of BTC price action will be ‘more volatile’ than it has come before, in line with previous years of the 2013 and 2017 bull market.
As various analysts celebrate the milestone of the weekly close, the upcoming opening of the US market could also provide excitement.
Monday could see the launch of the first Bitcoin ETF products with the blessing of US regulators, which occurs when the BTC / USD pair is less than $ 3,000 from new all-time highs.
As for derivatives, funding rates on exchanges have also cooled off since last week., which has been a relief for those concerned about unsustainable rises leading to a peak.
ETFs are hot, but not for everyone
Love it or hate it, this week is all about the Bitcoin ETF.
When rumors about the green light of US regulation began to circulate late last week, the price of Bitcoin got hot, and this week it seems that the trend will continue.
After years of rejections, The Securities and Exchange Commission (SEC) prepares to witness the launch of two ETF products, both based on the CME Group’s Bitcoin futures.
These precede a lengthy decision-making process that begins next month in relation to physical Bitcoin ETFs., those that have real BTC as their underlying asset and that constitute the subject of real interest to analysts.
There is no guarantee that these traditional ETFs will be approved, and already abounds concerns that the market may end up disappointed once again.
Nevertheless, With multiple applications to be decided, there are six months left for the SEC to take a step forward.
Optimism that the tide will turn in favor of the cryptocurrency industry continues this week as Grayscale confirm which will request the conversion of your flagship Bitcoin fund product into an ETF.
— Barry Silbert (@BarrySilbert) October 17, 2021
Grayscale’s background, the Grayscale Bitcoin Trust (GBTC), has given much to speak for itself in recent weeks, trading at a discount growing compared to cash BTC, amid fears that institutional clients are voting with their feet in the run-up to the ETF launch.
The higher commissions of the former are an example of the competitive advantage debate, while some have pointed out that futures-based ETFs will not work as a suitable alternative by definition.
This chart shows why you’re better off buying #Bitcoin than Bitcoin Future ETF. For investors, new Bitcoin ETFs might be more costly than purchasing cryptocurrency directly. Bitcoin Future has underperformed by 30ppts since start of Bitcoin Future in 2017. https://t.co/1ZnVBJQlGa pic.twitter.com/oXrZ95Wsmg
– Holger Zschaepitz (@Schuldensuehner) October 17, 2021
This chart shows why it is better to buy Bitcoin than a future Bitcoin ETF. For investors, the new Bitcoin ETFs could be more expensive than buying the cryptocurrency outright. The Bitcoin Future has underperformed by 30 points since the inception of the Bitcoin Future in 2017.
“For starters, most institutional players have direct access to CME futures. Typically, the main reason they would choose to trade ETFs rather than futures would be to avoid tracking error (against the spot price) of futures roll costs or price deviations from a contango or backwardation, “he added cryptocurrency trading firm QCP Capital in a circular to subscribers of its Telegram channel on Friday.
“As such, having the ETF based on CME futures defeats the fundamental advantage of ETFs; to follow the spot price as closely as possible. “
Difficulty is set at the seventh consecutive increase
Bitcoin network fundamentals continue to impress this week, and the difficulty is leading the pack.
What is possibly the most essential characteristic of Bitcoin is going from strength to strength, and on Tuesday it will seal a seventh consecutive rise. The last time that happened was in 2019.
That increase will take the difficulty back above 20 billion for the first time since June.
This occurs despite some volatility in the hash rate, with estimates which now go back down to 123 exahashes per second (EH / s), after having exceeded 140 EH / s this month.
Nevertheless, With the overall upward trend still intact, concerns are rare amid news that the United States now provides a home for the lion’s share of the mining power of Bitcoin.
Supply shock predicts a “good year” in 2022
Although forecasts on the price of Bitcoin focus on what might be possible in the fourth quarter of this year, some are already looking further, and using data to reach even more bullish conclusions.
One of the analysts who paints a rosy picture for 2022 is Willy Woo, creator of the data resource Woobull and well known for his research on the Bitcoin market cycle.
During the weekend, Woo highlighted the growing scarcity of Bitcoin as likely fuel for sustained price compression.
Historically, he noted, declining supply combined with more of that supply remaining in the hands of holders with no plans to sell creates a powerful bullish signal.
Your metric, “Long Term Holder Supply Shock” clearly shows this scenario multiple times throughout Bitcoin’s history.
“The technical name for this graph is ‘2022 is going to be a good year'”, he summed up to his Twitter followers.
What reported Cointelegraph, los Long-term holders already control a near-record share of the BTC supply, making the fight for the remaining coins to be expected to be more heated than ever..
This should be favored when a physical ETF is approved., something that could happen in November and continue for several months.
The balance of BTC in the main exchanges tracked by CryptoQuant has settled at just under 2.4 million BTC after a precipitous fall in September.
The next Bitcoin bear market is coming
With so much excitement about the possible Bitcoin price cap this year and how high it could be, some analysts are already turning their attention to the other side: the bear market.
Historically, nothing goes up in a straight line, and Bitcoin is no exception. Each halving cycle has seen a price spike the year after the block subsidy halving, followed by a mid-cycle price bottom.
This cycle, according to several well-known market participants, will be no different.
Therefore, a price spike will be followed by a prolonged decline, in line with what happened in 2014 and 2018.
To popular Twitter analyst TechDev, This minimum should, however, be an order of magnitude greater than the previous one –up to USD 60,000–, but the process should start already before the end of 2021.
“I want a longer cycle. Who doesn’t want it? But nothing I’ve seen at the macro level of the AP suggests it’s going to happen.”, warned to his followers on the weekend.
“Watch your indicators. 2-week RSI channel, RVI 92-93. If they touch, I’m out. Ignore them in the hope of a new paradigm and those who don’t will likely blow you away. “
Of several accompanying charts, one neatly showed how Bitcoin’s Relative Strength Index over two-week time frames neatly captured each spike..
The personality of Twitter Rekt Capital also took the opportunity to remind its followers and subscribers of the need to take profit on time..
“People believe that BTC will never see another 80% bear market because it is now too mature an asset.”, argument.
“Let’s not forget that a few months ago there was a correction of -53%. The average bear market is -84.5% deep. It is very likely that there will be one after this bull market. “
The weekend, however, produced an optimistic forecast for the bear market.; Dan Morehead, CEO of Pantera Capital, he claimed that the valley would be “shallower” than the others.
As Cointelegraph reported, Other measures point to the good times continuing into 2022, including for Bitcoin. Earlier this month, PlanB, creator of the share-flow-based Bitcoin price forecasting models, proclaimed that the bull run has left at least six months in duration.