“Resistance is futile” – 5 things to watch out for in Bitcoin this week

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Bitcoin (BTC) starts a new week high in several ways as BTC / USD seals its highest weekly close of all time.

After days of painfully slow progress, Bitcoin has finally broken out to break crucial levels.

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Some argue that the largest cryptocurrency is now ready to go “parabolic” and is firmly back on traders’ radar after a week dominated by record highs in altcoins.

Will “Moonvember” live up to its name? Cointelegraph takes a look at what could move the market in the coming days.

Large futures gap opens when BTC exceeds $ 65,000

It took a week of patience, but the bulls were finally rewarded overnight on Sunday when Bitcoin fled and recaptured its old all-time high of $ 64,900 from April.

As is often the case with bull runs, the pace of gains was fast, with an hourly candle alone adding $ 2,000 to the spot price.

The timing was impeccable, coming just before the week’s close, allowing the weekly chart to hit a new record high of $ 63,270.

Predictably, the responses were overwhelmingly positive as higher short-term predictions returned.

“Resistance is futile,” summed up podcast host Scott Melker with a diagram showing the Bitcoin trend breakout.

In addition to the weekly all-time high, there was another milestone for the broader crypto market – the combined market capitalization of all tokens topped $ 3 trillion for the first time.

As Cointelegraph reported, optimism remains about Bitcoin’s longer-term potential, with opinions growing around the idea that the lion’s share of returns is yet to come this cycle.

“People who think it’s too late to buy BTC don’t know how much higher it can go this cycle,” added popular analyst Rekt Capital.

Filbfilb, analyst and co-founder of the trading platform Decentrader, has meanwhile named the CME futures gap as one of the few possible reasons for a correction.

Given that the markets will open significantly higher on Monday than they did on Friday, the potential for the spot to move down for a short time to “fill” the resulting void – in line with historical patterns – remains.

“Looks pretty bullish, could be due to the cme gap, but looks like a fire overall,” he told the Telegram channel subscribers.

CME Bitcoin Futures 4-hour candle chart. Source: TradingView

Funding grows while “extreme greed” awaits

Apart from the CME gap, another derived keyword can bring cats under the pigeons in short periods of time.

The data at the time of writing showed that funding rates on the stock exchanges were moving back into unsustainable territory.

While not as high as it was during the run to $ 67,000 and up in October, very positive funding often leads to a price correction as traders become complacent and long for the market.

However, this was of little concern to analyst Dylan LeClair as there were no signs of an increase in leveraged longs.

“BTC + $ 2,000 in the last few hours with no major increase in futures open interest or perp funding,” he told Twitter followers.

“The current price movement is the result of spot selling exhaustion, not the result of a sudden increase in leverage. No sales-side liquidity = gap upwards. “

Chart of BTC funding rates. Source: Coinglass

The overall mood for market sentiment is tending towards “extreme greed”, as measured by the Crypto Fear & Greed Index.

At 75/100, however, the index indicates that there are still at least 20 points to run before classic top conditions occur.

Crypto Fear and Greed Index. Source: Alternative.me

Miners still don’t sell – here’s why

With new all-time highs seemingly just around the corner, Bitcoin miners continue to show solid determination and “hodl” are not selling their BTC.

Data from the on-chain analysis service CryptoQuant shows that the outflows from miner wallets have remained unchanged in recent weeks and months with a few exceptions.

Bitcoin miner outflow diagram. Source: CryptoQuant

There may be a very good reason – since the block subsidies cut in half in May 2020, when miners’ earnings in BTC terms fell 50%, the value of their US dollar income has skyrocketed.

“Despite this drop in BTC-denominated revenue, miners’ revenue in USD has risen 550% since halving in 2020, and is approaching an ATH of more than $ 62 million per day,” said analytics firm Glassnode on Monday.

An accompanying diagram showed the extent to which the miners are capitalizing on their positions and how the Hodl has paid off during the current four-year halving cycle.

Bitcoin Miner Earnings vs. BTC / USD Annotated Chart. Source: Glassnode / Twitter

As Cointelegraph noted, the behavior of miners in the fourth quarter is very different from what they did at the beginning of the year.

First quarter outflows were significantly higher, despite BTC / USD trading at levels much lower in comparison than they are today.

Hash rate shows “pure resilience”

The bullish sentiment among miners is accompanied by a corresponding “only up” narrative for the mining hash rate.

As a measure of the computing power devoted to maintaining the blockchain, the Bitcoin network’s hash rate continues to bounce back from the upheaval caused by the Chinese ban in May.

In record time, the metric has nearly wiped out the impact of the event as miners move to the U.S. and elsewhere and existing operations expand their capabilities.

“The recovery from the mining ban in China has made the sheer resilience, robustness and decentralization of the Bitcoin network visible to all,” LeClair wrote in Twitter comments.

The hash rate varies depending on the estimate used, as its exact amount cannot be accurately calculated. Blockchain’s seven-day average at the time of writing was 161 exahashes per second (EH / s), with the live all-time high at 168 EH / s.

Bitcoin 7 Day Average Hash Rate Chart. Source: Blockchain.com

Beyond the hash rate, the network difficulty remains focused on further increases, as eight straight increases have already been recorded in a row.

In five days the difficulty at current prices will increase by about another 3% to 22.33 trillion – even at all-time highs from the time before the China debacle.

Inflation worries due with CPI data

Inflation is still hot in the macro markets, which continues to have a positive impact on the attractiveness of Bitcoin as a hedge.

Related: Top Five Cryptocurrencies You Should See This Week: BTC, DOT, LUNA, AVAX, EGLD

With the US consumer price index (CPI) data available this week, the “decoupling” between forecasts and reality is expected to widen further.

The Federal Reserve, which recently signaled it would scale back asset purchases, may even be forced to change course due to the current environment, an analyst told Bloomberg.

“We believe there is an upside risk on both CPI numbers, so there is a real risk that the Fed may actually accelerate the pace of asset purchases,” said Mahjabeen Zaman, Citigroup senior investment specialist.

As Cointelegraph pointed out, the CPI itself is a poor measure of inflation as it excludes many of the assets that are seeing the greatest increases in value and price.

This has led to calls for the introduction of Bitcoin to maintain the purchasing power of both individual savers and wealthy companies, and was a key factor in MicroStrategy’s move to convert large chunks of its balance sheet into BTC.