70% of BTC sleeps for a year — 5 things to know in Bitcoin this week
Bitcoin (BTC) begins Thanksgiving week with a return to $37,000 in the United States as bulls stubbornly refuse to budge.
BTC price action remains at 18-month highs as another weekly close gives fresh bull market momentum.
The biggest cryptocurrency continues to hold back ground, and while the upside is now slower than in previous weeks, BTC/USD is up as much as 7% for the month.
How might the coming days shape up for Bitcoin?
Macroeconomic data releases provide the opportunity for some rapid volatility, but under the hood, the landscape is as colorful as it will be in 2023 when it comes to the fundamentals of the Bitcoin network.
At the same time, the dynamics of supply is amazing – coins that have been dormant for a year or more cover more than 70% for the first time, which shows that long-term owners are not willing to “sell the rip”.
Bitcoin's dominance is also continuing strong, giving hope that a classic crypto bull market is just getting started.
Cointelegraph looks at these factors and more as part of its weekly list of everything that will move BTC price action in the coming week.
Bitcoin traders are waiting for the chance of BTC price to recover again.
Bitcoin spent a decent floating weekly close to $37,500, but then failed to hold that level.
With the continued difficulty of finding higher ground as support, BTC's price action has now reached the $37,000 mark since November 20, according to data from Cointelegraph Markets Pro and TradingView.
Popular trader Skew called the latest social media analysis in part “overpriced and an offer over $40K.”
“This will require constant demand for spot BTC to break imo. A high price confirmation is seeing limit bids close to price, indicating higher prices and demand.”
Hours before Wall Street opened, sentiment among some market participants was for a short-lived range-bound trade.
“Bitcoin is doing a massive construction job here,” Michael Van de Pop, founder and CEO of Eight Trading, told X subscribers at the close of the weekly candle.
“Resistance at $38k, support at $33-34.5k is relevant for long-term entries. I think we will sweep a little lower (probably below $36k) before revisiting the highs. The trend should hold.”
The concept of rebalancing to check recent liquidity is not new. As Cointelegraph reports, lower targets include a trip to $33,000 and even below $31,000.
Unlike the first push to 18-month highs last week, however, the Bitcoin market data shows a very stable situation among traders, both open interest (OI) and subsidies remain neutral.
#Bitcoin Some shorts pushed through that push before the weekly close.
Overall open interest is still very low compared to a few weeks ago. Independent funding rates.
If you want to trade, consider Bybit and support me: pic.twitter.com/mtn3aNTfvv
— Daan Crypto Trades (@DaanCrypto) November 20, 2023
BTC/USD rose 7% in November – modest gains, but still the pair's best-performing November since 2020, according to data tracked by CoinGlass.
“Although the sentiment is not good, $BTC increased ~5% in November,” noted trader Diane CryptoTrades commented on the performance.
“December is an unsettled month that brings a lot of numbers. I think the end of the year is going to be a riot!”
Jobs, the Fed's minutes lead a short Thanksgiving macro week
The US Thanksgiving week is set to be marked by the release of good macroeconomic data, providing relief for crypto traders.
Jobless claims will mark one of the highlights of the next few days, which will be released on November 22.
While Bitcoin has been vulnerable to macro volatility in general this year, unemployment surprises have been successful in promoting short-term momentum in the past.
After last week's data releases showed that US inflation slowed faster than the market expected, however, market participants are taking a “wait and see” approach ahead of the next decision on interest rate changes in mid-December.
So far, consensus on current levels at the Federal Reserve's Federal Open Market Committee (FOMC) meeting has been virtually unanimous, according to data from the CME Group's FedWatch tool.
The Fed will release the minutes of the previous FOMC meeting this week.
Key events this week:
1. Existing home sales data – Tuesday
2. Fed meeting minutes – Tuesday
3. Core durable goods orders – Wednesday
4. First unemployment claims – Wednesday
5. US markets are closed for Thanksgiving – Thursday
6. US markets close at 1 PM ET – Friday.
happy…
— Kobeissi Letter (@KobeissiLetter) November 19, 2023
“Short week, but still some important events to watch. The minutes of the Fed meeting will be in the spotlight,” financial analyst Kobeisi Letter wrote in his weekly forecast.
An analysis of the increase in Bitcoin mining
Bitcoin network fundamentals remain at or near all-time highs – and depending on how the recent BTC price action plays out, they could still go higher this week.
Both hashrate and mining difficulty are in full bull mode, the analysis concludes, having spent most of 2023 growing steadily with only minor changes along the way.
However, the optimistic situation is not without warning signs.
On November 19th, on-chain CryptoQuant's latest Quicktake market update contributor Gigisulivan said that new hash rate highs typically precede BTC price declines.
“This was not the case after September 15th as the BTC spot ETF took over the rally and drove the price of BTC up 30%+,” he admitted.
Despite this, there is still time for history to repeat itself, and the result could return to the $30,000 mark.
“It's worth noting that we had another new high on the Hashrate 2 weeks ago, which was set before the dive range in a normal timeframe and a normal pump,” the update added.
“A pullback target of between 30-31.5k is likely.”
As Cointelegraph reports, one theory suggests that miners will want to increase their BTC reserves before the April 2024 halving, when the amount of BTC allocated to them will decrease by 50% with each block.
Bitcoin's next automated difficulty adjustment is scheduled for November 25, and is currently expected to raise difficulty slightly — around 2%, according to resource tracker BTC.com.
Dominance fuels hopes of a classic bull market.
When it comes to Bitcoin versus altcoins, the classic market dominance that characterized the early stages of a crypto bull market remains in play.
Bitcoin currently accounts for 52.5% of the total crypto market cap – down 2% from the beginning of the month, but still up from a year-to-date low of nearly 40%.
“Bitcoin's price supremacy has finally returned, at least for the time being,” research company Sentiment wrote in an update on the situation at the end of last week.
“Altcoins were on a renaissance at the tail end of the week after last month's bright rally. If the public starts to panic and expose the FUD, however, we could see some quick price corrections.
Bitcoin traditionally advances ahead of major altcoins, with small signs of a pullback due to price advances permeating crypto markets.
For Daan Crypto Trades, the sequence of events must continue to play out.
On November 17th, he argued that “the best thing for Bitcoin and the entire market will be when BTC grinds down if Bitcoin Dominance resumes.”
There is not yet enough liquidity to allow the entire market to move at once. Liquidity is spread so thin that's why we see so many of these shortages. Then as BTC accumulates, it can flow back into Alt to capture capital. The weak ETH/BTC will be the strong BTC most of the time.
ETH/BTC returned to 0.05 BTC at the end of October – the lowest since mid-2022.
The supply sleep has set a new record
When a long-term holder takes a decision to HODL after a rapid price action, few charts are arguably overvalued with dormant supply.
Related: Bitcoin Pre-Half ‘Target Zone' Nears $50K BTC Price
From a frequency perspective that shows the percentage of mined BTC that hasn't moved in at least a year, the scale has now reached its peak.
More than 70% of the supply remains in the same wallet, ignoring any gains seen since the bottom of the 2022 bear market.
“Bitcoin is up +139% in the last year and 70% of all BTC in circulation has not been sold/transferred,” responded Caleb Franzen, senior analyst at Cubic Analytics.
“Now this is guilty.”
Franzen mentioned that Glassnode, an on-chain analytics firm, was uploaded to X by William Clemente, co-founder of crypto research firm Reflexivity.
As Cointelegraph reports, the immediate area below $40,000 could represent the current all-time high-yield basin for Bitcoin investors who bought BTC in 2021.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
