Funding rates echo $69K BTC price — 5 things to know in Bitcoin this week
Bitcoin (BTC) will begin a new week near $37,000 as macroeconomic data bounces back.
The largest cryptocurrency continues to circle the highest level in 18 months, with the excitement of the approval of a possible exchange-traded fund (ETF) in the United States driving sentiment.
That's becoming increasingly greedy, but according to the Crypto Fear and Greed Index, BTC's price action at the end of 2021 is consistent with the current all-time highs.
What could shake up the situation to create volatility in the coming days?
External trigger possibilities are more significant this week. US macro data, including the Consumer Price Index (CPI), has the potential to disrupt any sideways trading in risky assets.
As the dangerous geopolitical situation in the Middle East plays out in the background, several Federal Reserve officials are set to speak.
On the institutional side, meanwhile, the future looks decidedly bleak for Bitcoin – ahead of the upcoming ETF confirmation, the Greyscale Bitcoin Trust (GBTC) closes at parity with its net asset value.
Can Bitcoin markets stay the course and avoid a significant rebound? Cointelegraph takes a look at what to expect on the weekly BTC price volatility wing.
Funding rates flash warning with BTC price stuck at $37,000
Bitcoin's weekly close on November 12th set a new 18-month high, but what followed was not the results seen after other recent closes.
In the Asian trading session, BTC/USD instead fell below $37,000, holding tight to the trading range of the weekend, according to data from Cointelegraph Markets Pro and TradingView.
Following the situation, the famous trader and analyst Credible Crypto indicated that this will change soon. The reason, he said, is open interest (OI), which is now at multi-day highs and is apt to trigger volatility.
The body of X's post read “OI up from lows which means more positions to squeeze.”
Credible Crypto gave a possible local low target of $36,600, while another post said Bitcoin was “very close” to a further reversal.
Countering optimism on short-term market action was liquidity. Not only are these positives, but they also hit an all-time high from Bitcoin November 2021, indicating the overall downside of being long BTC at current levels.
Bitcoin funding volume is at its highest level since the last ATH. pic.twitter.com/mMlnJleQ5u
— Thomas Kralow (@TKralow) November 12, 2023
“Finance rates very high across the board” Daan Crypto Trades co-trader commented alongside the asset CoinGlass control data.
Although this is not always an immediate reason for flooding, ideally this will return to normal after some further variation. It should be noted that this can last for weeks or even months during strong trends.
In addition, noting the situation of the game in money, the famous analyst Caue Oliveira told traders to be careful.
“This price indicates that optimism is spreading in the market, with a large number of futures contracts to bet on the increase in price,” wrote CryptoQuant for the chain analysis platform on November 10 in the Quicktake market update.
“However, this setup is risky as it can show excessive bullish sentiment and price cuts can create a lot of liquidity.”
The CPI comes amid a new US government shutdown.
Classic macro setup marks the third week of November – CPI leads the flood of data releases that have previously fueled risk asset volatility.
Due on November 14 for the month of October, the CPI publication is keenly watched by inflation watchers, followed a day later by the Producer Price Index (PPI).
Various Fed officials will also take the stage for speaking engagements both during and after the data is released, providing insight into the Fed's real-time view of inflation forces.
“Important Week for Inflation and the Fed” Financial Commentary sources Kobeisi's letter summarizing macro diary days to X while uploading.
Key events this week:
1. October CPI inflation data – Tuesday
2. October PPI inflation data – Wednesday
3. Retail sales data – Wednesday
4. Philly Fed Manufacturing Data – Thursday
5. Building Permits Information – Fri
6. A total of 14 Fed speaker arrangements
An important week for…
— Kobeissi Letter (@KobeissiLetter) November 12, 2023
The popular trader Skew, meanwhile, pointed to expectations that inflation would continue to decline, despite some unwanted surprises in October's data releases.
This should essentially provide a tailwind for crypto markets, but as Cointelegraph reports, Bitcoin's reaction to losses in major targets has been muted this year.
CPI and PPI next week CPI – Tuesday 14 November PPI – Wednesday 15 November
Expected core inflation to fall sharply ~ Expected lower inflation pic.twitter.com/PrQ0Rsf1Ab
— Skew Δ (@52kskew) November 12, 2023
Added to the mix is another common symptom – an ongoing partial US government shutdown. While it's still far this year, the need to reach an agreement on congressional spending before the Nov. 17 deadline is becoming real again.
If that happens, the shutdown would be only the fourth in the US in the past decade.
Altcoins will pay attention when crypto capital returns
Capital flows into the industry are being closely monitored, with ETF approvals firmly on the radar of crypto market participants.
Buyer interest forms a key factor on the list for the bull market to come back, and the flow is already attracting mainstream attention.
“For the first time in years, the crypto markets are starting to see a lot of new liquidity,” Kobayashi wrote in an X post.
Since November 2022, the combined crypto market capitalization has increased by $600 billion following the FTX meltdown and Bitcoin's cycle low of $15,600.
“This is a +75% jump in one year and Bitcoin is up +120% over the last year,” he added.
“This comes after years of consistent outflows from crypto markets. One thing we've seen many times in the past? Exchange returns always result in historic moves in crypto.”
Bitcoin isn't just showing potential — altcoin markets are taking off, traders and analysts say.
#Altcoins are flying. It's going to be epic. pic.twitter.com/bSAw0nKKL0
— Stockmoney Lizards (@StockmoneyL) November 9, 2023
Although Bitcoin's dominance over the total crypto market capitalization is still strong, the analyst advised the cryptocurrency not to take this as a sign of relative altcoin weakness.
“Some people have told you to ignore altcoins completely because Bitcoin is becoming increasingly dominant. And as you can see, that's a critical mistake,” he told X subscribers over the weekend.
The accompanying chart shows the behavior of BTC's price during each year of its half-cycle, with altcoins showing similar responses.
With Bitcoin's “early” cycle high in mid-2024, per cryptocurrency, altcoins are likely to underperform.
“I think now Altcoins are already low for the cycle, and those who have done nothing should buy higher,” he continued.
“Let's say, ‘Ignore Altcoins at their bottoms and only buy Bitcoins that have already been mined.' That's what happened this year. 2024 is coming, Altcoins are poised to get even stronger!”
GBTC's decline crosses two-year lows
A measure of Bitcoin's return to mainstream attention – despite the lack of retail interest – is the largest institutional investment vehicle.
Greyscale Bitcoin Trust (GBTC) is fast approaching net asset value (NAV), the parity of Bitcoin's spot price.
GBTC has previously traded at a higher implied share price than BTC/USD, but the past two years have seen a premium decline, reaching 50% at one point.
Now, the discount to NAV is just 10.35% – the lowest since August 2021.
Commenting on the event, William Clemente, founder of market research firm Reflexivity, linked GBTC's reversal of fortunes to the future trajectory of ETFs.
“At this point, the BTC ETF approval seems to be priced in by the market,” he wrote last week.
Grayscale continues to petition for the right to convert GBTC to a Bitcoin spot ETF.
Crypto investors remain greedy.
There is no ignoring the need to squeeze profits after the longest crypto bear market on record.
Related: Pre-ETF BTC Price ‘Crash' Or $150k By 2025? Bitcoin predictions vary.
This continues to be accurately reflected in the Crypto Fear and Greed Index, a well-known gauge of market sentiment, which is at levels last seen in November 2021.
While not yet at extremes, the index unequivocally shows that the average crypto investor is approaching a state of irrational exuberance.
Fear and Greed He stood at 72/100 on Nov. 13, hitting 74/100 on Nov. 6.
Commenting on market psychology at the beginning of the month, renowned trader Pentoshi reminded X readers that high levels of both fear and greed can provide “great opportunities” for those who use market volatility on a timely and emotional level.
Typically, when the index is below 10/100 or above 90/100, crypto markets are in line for an immediate trend reversal.
Now is a good time to share this again.
Fear and greed
Markets compel participation, https://t.co/f1nJOyGaLS compel you to act
— Pentoshi euroPeng (@Pentosh1) November 12, 2023
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.
