Exchange Flow Gap Reaches 10K BTC — 5 Things to Know in Bitcoin This Week
Bitcoin (BTC) will launch in the second week of November. Still Strong at 18-Month Highs – Where Could BTC's Price Movements Head Next?
The biggest cryptocurrency fought off selling pressure to close another impressive weekly close.
In what can be described as a reversal of sentiment, Bitcoin and altcoins alike are refusing to retrace the gains that began a month ago.
In a bleak macroeconomic environment, where assets like stocks are feeling the pressure, and bulls are hoping the upside is not over yet.
There are many potential volatility triggers in store for the coming week. With inflation still on everyone's mind, the US Federal Reserve will deliver a round of comments on planned actions, with Chair Jerome Powell among the speakers.
A short trading week on Wall Street means extended “off-the-clock” trading next week, allowing crypto to see more volatile moves toward the next weekly close.
Behind the scenes, Bitcoin is technically as strong as BTC's price action suggests – hashrate and difficulty, already at all-time highs, are set to add to their record highs in the coming days.
Cointelegraph delves deeper into these issues in its weekly overview of what to expect when it comes to Bitcoin market activity in the short term and beyond.
Bitcoin bulls refuse to give an inch
Just like last week, Bitcoin did not disappoint with its weekly candle close to November 6.
The move above $35,000 set a new 18-month high and a short trip below $36,000 has seen volatility ahead.
A fierce battle between buyers and sellers means that the current resistance level is becoming difficult to overcome, as the liquids are pressed closely.
As noted by the famous Trader Skew, the hourly chart indicates that “both sides of the book have been swept” on exchanges.
On November 5, Skew also showed open interest (OI) on the largest international exchange, Binance – a key condition for volatility in recent weeks.
$BTC OI and perp delta here are straight people longing LTF highs and shorting LTF lows.
OI continues binary growth ~ important for early next week pic.twitter.com/2bfc9Q2SwG
— Skew Δ (@52kskew) November 5, 2023
Next, affiliate trader Daan Crypto Trades referenced the volume data that pays off long-term shorts.
“There are still a lot of spots that opened over the weekend so I expect the future will take those out (on both sides) after opening and Monday,” part of X's commentary read at the time.
Cointelegraph reports that bets among market participants include $40,000 as a popular BTC price target. The time is ripe for debate, but predictions for the end of 2023 hover at high levels.
In the meantime, more conservative approaches remain. Among them is prominent crypto trader Tony, who said over the weekend that he would not bet on the bulls throwing up resistance from X subscribers.
“I am short if we lose that support zone at $34,100 and I will close the current long position if we lose $33,000,” he said, updating his current trading strategy.
“I would never recommend longing to resist here.”
Federal speakers will lead the macro week
With a break in US macroeconomic data releases this week, attention is once again on the Fed as a source of market volatility.
Various speaking engagements in the week leading up to the Nov. 10 Veterans Day holiday will see officials, including Fed Chairman Powell, take the stage.
The timing is perhaps more interesting than the rhetoric – the Fed continued to hold off on raising interest rates last week, even as data showed inflation expectations were rising.
Previous comments have led markets to shy away from maintaining rate policy until next year. According to data from CME Group's FedWatch Tool, bets on the outcome of a rate decision in more than a month are on hold.
“All the focus remains on the Fed,” Financial Commentary source Kobeisi wrote in his comments on the upcoming macro diary.
Key events this week:
1. Chairman of the Federation Paul speaks – Wednesday
2. First unemployment claims – Thursday
3. Chairman of the Federation Paul speaks – Thursday
4. Consumer sentiment data – Friday
5. ~ 10% of the S&P 500 reports this week.
6. A total of 12 Fed speaker arrangements
All attention remains…
— Kobeissi Letter (@KobeissiLetter) November 5, 2023
Kobeisi added that volatility is likely to continue in the coming days on the back of turbulence in bond markets. Stocks also saw significant changes last week, with the S&P 500 suddenly turning around after falling in the second half of October.
Next, investment research platform Game of Trades suggested that “major economic volatility” is on the horizon as a result of an unusual contraction in US consumer credit.
“This has only happened 3 times in the last 75 years,” he said, describing savings as a percentage of U.S. national income.
The other two cases They coincided with the global financial crisis of 2008 and the Covid-19 crisis of March 2020.
This has only happened 3 times in the last 75 years.
Savings as a % of national income is now contracting.
The previous 2 contracts agreed with the following
– 2008 financial crisis – 2020 pandemic
A high interest rate + high debt environment is a strong headwind for consumers… pic.twitter.com/T7EXvBSaMT
— Game of Trade (@GameofTrades_) November 5, 2023
Hash speed, difficulty has moved to new all-time highs
The Bitcoin Network Foundation's ‘gear up' feels relentless after this year's gains.
Hash rate and mining difficulty have now erased every recent high, and the upcoming correction will strengthen those levels.
Difficulty is projected to increase by another 2.4% on November 12, reaching a height of nearly 64 trillion for the first time in Bitcoin's history, according to data from tracking resource BTC.com.
Hash speed, while more fluid and difficult to accurately measure, has clearly trended in recent months.
According to James Van Straten, research and data analyst at CryptoSlate, last week was particularly important for hash rate, the estimated combined processing power allocated to the network by miners.
Yesterday, saw the biggest day in #Bitcoin hash rate history at 521 eh/s.
We are halfway through this crisis period, and the estimated crisis correction is over 5.5%. @maxkeiser @TuurDemeester @BitPaine pic.twitter.com/aRSn56Ehab
— James V. Straten (@jimmyvs24) November 5, 2023
As Cointelegraph reports, one theory that calls for the trend to continue to halve block subsidies next year revolves around miners.
In an interview in September, Filbfilb, the founder of Decentrader's trading group, argued that miners would want to increase their BTC holdings before reducing their BTC rewards by 50%.
At the time of the halving, however, BTC/USD could trade at $46,000 as a result, he suggested.
The exchange flow gap reaches the second-highest level
As the crypto markets come back to life, profitability conditions are changing among Bitcoin hodlers.
As reported by Cointelegraph, the BTC spot price head saw its initial return above $30,000 above the purchase price of various recent sets of investors.
Now, there are signs of a turnaround in the exchange rate, with inflows taking a back seat and year-on-year nearing highs.
For van Straten, the event marks a “big change in the flow of Bitcoin exchanges.”
“The recent withdrawal of more than 61,000 BTC is evident in the renewed momentum in Bitcoin mining, with the year-to-date low rising to a high of 43,000 BTC,” he wrote in an analysis by CryptoSlate on November 3rd.
“This volatility suggests that investors are increasingly choosing to hold their Bitcoin assets off-exchange, possibly indicating long-term confidence in Bitcoin's value.”
He added that the difference between deposit and withdrawal rates on the BTC futures exchange has reached its second-highest value to date – a “stunning” 10,000 BTC, according to Glassnode data from Chain Analytics.
“This difference is only overshadowed by the fall of FTX, which saw a withdrawal of over 80,000 BTC,” the analysis concluded.
“These trends may indicate a shift in investor sentiment, with many investors choosing to hold their assets for the long term rather than looking for quick cash on cash transactions.”
Glassnode also shows that total capital inflows are reaching year-on-year highs – a phenomenon that Ali, a well-known social media trader and analyst, represents “strong investor confidence”.
A lot of capital is flowing into #crypto right now, which shows strong investor confidence.
In fact, we see a positive capital inflow of nearly $10.97 billion, a peak in 2023! pic.twitter.com/XfXz6aaVOK
— Ali (@ali_charts) November 5, 2023
Crypto's “fear” peaked after $69,000
Optimizing sentiment is often a double-edged sword in crypto, as the average hodler's mindset is increasingly focused on profits.
Related: Sam Bankman-Fried Convicted, PayPal SEC Subpoena and Other News: Hodler's Digest, Oct. 19–Nov. 4
This is evidenced by the Crypto Fear & Greed Index, a well-known market sentiment indicator that flashes the warning when the market enters irrational levels of exuberance.
Fear and Greed in Bitcoin's journey reached its current all-time high of 84/100 in November 2021 and is only 10 points away from that peak as of November 6.
At 74/100, the market is already “greedy” than anywhere else in the last two years. But for crypto Tony, there is still more upside to come before the volatility of sentiment becomes too much to ignore.
“I want to see a lot of greed before you think about closing some positions,” he told X subscribers about the index readings on November 5, arguing that Ether (ETH) should go up first.
Historical highs for fear and greed have come in around 95/100, last seen in February 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.
