Bitcoin (BTC) returned to $37,000 at the start of the US Thanksgiving week as bulls stubbornly refused to loosen their grip.
BTC price action remains tantalizingly close to 18-month highs as the weekly close provides a fresh taste of bullish momentum.
The largest cryptocurrency continues to hold on to regaining lost ground, and although gains are now slower than in previous weeks, BTC/USD is up 7% so far this month.
What does the future hold for Bitcoin?
Macroeconomic data provides the opportunity for some sudden moves, while behind the scenes, the outlook for Bitcoin network fundamentals is as positive as it gets in 2023.
At the same time, the supply dynamics are surprising – for the first time, tokens that have been dormant for a year or more account for more than 70% of the supply, indicating that long-term holders are unwilling to “sell.”
Bitcoin’s dominance also remains strong, raising hopes that the classic cryptocurrency bull run is in its early stages again.
Cointelegraph will look at these factors and more as part of our weekly digest of everything influencing BTC price action in the week ahead.
Bitcoin traders maintain odds on Bitcoin price correction
Bitcoin ended the week quite strongly, hitting $37,500 at one point, but subsequently failed to hold that level.
BTC price action is now back near the $37,000 mark as of November 20, according to data from Cointelegraph Markets Pro and Cointelegraph Markets Pro, continuing to demonstrate the difficulty of recapturing higher support levels. trading view.
Popular trader Skew says: “Supply higher than price, close to $40,000” famous This is part of his latest social media analysis.
“In my opinion, this needs to be resolved by continued demand for spot Bitcoin. Bullish confirmation would be to see the limit close to the price here, which would signal higher prices and demand.”
With just hours left until Wall Street opens, the feeling among some market participants is that range trading will continue in the short term.
“Bitcoin is clearly establishing a range,” said Michaël van de Poppe, founder and CEO of trading firm 8. Tell X subscribers completed as a weekly candle.
“Resistance at $38,000 and support at $33-34.5K are levels to watch on the bulls’ entry. I think we’ll see a slight dip lower (possibly just under $36,000) before re-treading the highs ). Need to grasp the trend.”
The concept of using pullbacks to test near-term liquidity is nothing new. According to Cointelegraph, downside targets include a rise to $33,000 and even below $31,000.
However, unlike last week when it hit an 18-month high for the first time, Bitcoin market data shows a much calmer mood among traders, with both open interest (OI) and funding rates remaining neutral.
#bitcoin Some bears got out on this push before the weekly close.
Overall open interest remains quite low compared to a few weeks ago. Financing rate is neutral.
If you are looking for an exchange to trade on, please consider Bybit and support me:
pic.twitter.com/mtn3aNTfvv— Daan Crypto Trades (@DaanCrypto) November 20, 2023
According to data from monitoring resource CoinGlass, BTC/USD is still up 7% in November – a modest gain, but still the best November for the pair since 2020.
Popular trader Daan Crypto Trades said: “Despite the negative market sentiment, BTC price increased by around 5% in November” commented About performance.
“December tends to be a volatile month with a lot of data. I think we will definitely experience turmoil at the end of the year!”
Jobs and Fed minutes lead Thanksgiving macro week
The U.S. Thanksgiving week will be marked by the release of a slew of sober macroeconomic data that will bring relief to cryptocurrency traders.
Initial jobless claims will be one of the highlights in the coming days, with these data due to be released on November 22nd.
While Bitcoin has generally been less vulnerable to macro-induced volatility this year, jobless surprises have still managed to inject short-term momentum in the past.
However, data released last week showed that U.S. inflation is cooling faster than market expectations, but market participants are in “wait and see mode” before making the next decision on interest rate adjustments in mid-December.
So far, there has been near consensus at the Fed’s Federal Open Market Committee (FOMC) meeting to maintain current levels, according to CME Group. Fed Watch Tool.
The Federal Reserve will release the minutes of its last Federal Open Market Committee (FOMC) meeting this week.
Main events this week:
1. Existing home sales data – Tuesday
2. Fed Meeting Minutes – Tuesday
3. Core Durable Goods Orders – Wednesday
4. Initial jobless claims – Wednesday
5. US markets are closed for Thanksgiving – Thursday
6. U.S. markets close at 1 p.m. Eastern Time on Friday
Happy…
— KobeissiLetter (@KobeissiLetter) November 19, 2023
“Although the week is short, there are still some important events worthy of attention. The minutes of the Federal Reserve meeting will be the focus.” The financial commentary resource “Kobeissi Letter” wrote in part of the weekly forecast.
Analysis focuses on Bitcoin mining boom
Bitcoin network fundamentals remain at or near all-time highs, and based on how recent Bitcoin price action has behaved, they could jump higher this week.
The analysis concluded that both hash rate and mining difficulty are in full bull market mode, with a sustained upward trend for most of 2023, with only minor retracements during the period.
However, the optimistic status quo is not without its caveats.
in his latest shorthand On November 19, in a market update from the on-chain analysis platform CryptoQuant, contributor Gigisulivan pointed out that new computing power highs traditionally precede BTC price declines.
“After September 15th, this was no longer the case, as the BTC spot ETF rally dominated and pushed BTC prices up over 30%,” he admitted.
Nonetheless, there is still time for history to repeat itself, and a return to the $30,000 mark is possible as a result.
The update added: “It’s worth noting that two weeks ago we hit another new high in hashrate, which is still within the usual timeframe and usual pump values before the dump.”
“The most likely pullback target is between 30-31.5k.”
According to Cointelegraph, one theory suggests that miners will seek to increase their BTC inventories ahead of the April 2024 halving, when the number of BTC awarded to them per block will be reduced by 50%.
Meanwhile, Bitcoin’s next automatic difficulty re-adjustment is scheduled for November 25, and according to data from monitoring resources, only a small increase in difficulty is currently expected – around 2% Bitcoin Network.
Dominance fuels classic bull market hopes
When it comes to Bitcoin vs. altcoins, the classic surge in market cap dominance that characterizes the early stages of a cryptocurrency bull run is still in play.
Bitcoin currently accounts for about 52.5% of the total cryptocurrency market capitalization, which is about 2% lower than at the beginning of the month but still significantly higher than the year-to-date low of nearly 40%.
Research firm Santiment said: “Bitcoin’s price dominance is finally back, at least for now.” wrote Update on status late last week.
“Altcoins have been pulling back this weekend after a strong rally over the past month. However, if the crowd starts to get worried and show fear, we could see prices rebound quickly.”
Bitcoin has traditionally grown ahead of major altcoins, with small-cap tokens ranking at the bottom as excitement about rising prices permeates the crypto market.
For Daan Crypto Trades, ideally this chain of events should continue to unfold.
“It would be best for Bitcoin and the market as a whole if Bitcoin dominance takes off again while Bitcoin continues to rise,” he said debate November 17.
“There isn’t enough liquidity to keep the entire market functioning at the same time. This is why we often see an influx of funds because the liquidity is spread too thin. Then, when BTC rebounds, the funds can flow back into alternatives. To catch up. Most of the time, the weaker ETH/BTC, the stronger BTC.”
At the end of October, ETH/BTC recovered to 0.05 BTC, its lowest level since mid-2022.
Supply hibernation hits new record
When it comes to long-term holders’ determination to hold on beyond immediate price action, few charts are as bullish as dormant supply.
Related: Bitcoin nears pre-halving ‘target zone’ with price approaching $50,000
Judging from its iteration showing the percentage of mined Bitcoin that has not changed in at least a year, the metric has now hit an all-time high.
Over 70% of the supply has ignored any gains since the 2022 bear market bottom and remains in the same wallet.
Caleb Franzen, senior analyst at Cubic Analytics, said: “Bitcoin has risen 139% in the past year, and 70% of the BTC in circulation has not yet been sold/transferred.” responded.
“Now that’s faith.”
Franzen cited data uploaded to X’s on-chain analytics firm Glassnode by crypto research firm Reflexivity co-founder William Clemente.
As Cointelegraph reported, for those Bitcoin investors who purchased BTC during the 2021 rally to current all-time highs, the area immediately surrounding the $40,000 level will likely represent a critical profit-taking watershed.
This article does not contain investment advice or recommendations. Every investment and trading activity involves risks, and readers should do their own research when making decisions.
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