Bitcoin (BTC) is simply refusing to die this week as a drop below $ 60,000 barely lasts an hour and the bears are burned once again.
After a fairly uneventful weekend, Sunday October 17 saw a typical dip before a dramatic resurgence for BTC / USD took place just an hour later.
With that, Bitcoin has not only preserved its bullish trajectory, but has also sealed its highest weekly close in history: around $ 61,500.
As the market prepares for a possible start-up for the first U.S. Bitcoin exchange-traded funds (ETFs), volatility is almost guaranteed, analysts say.
Cointelegraph takes a look at five things to consider as BTC / USD squares to all-time highs and institutional access takes a historic leap forward.
Bitcoin gives less than an hour to "buy the dip"
Just when it seemed that the race to all-time highs had hit a roadblock, Bitcoin surprised everyone once again overnight.
After losing $ 60,000 on Sunday night, the bulls had no time for BTC price weakness, and before BTC / USD reached $ 59,000, they embarked on an aggressive buying spree.
Hours later, the pair was back above not just $ 60,000 but $ 62,000, and it has been holding there as of this writing.
The episode didn't even affect Bitcoin weekly closing, which despite the volatility still ranked as the highest of all time, around $ 61,500.
"The historic weekly close now means that BTC is well positioned to keep improving," said trader and analyst Rekt Capital. summarized on Monday.
He added that the next phase of BTC price action will be "more volatile" than what has happened before in the previous years of the 2013 and 2017 bull market.
As several analysts celebrate the weekly closing milestone, meanwhile, the upcoming opening of the US market could also generate excitement.
Monday October 18 could see the launch of the first Bitcoin ETF products with the blessing of US regulators, as BTC / USD is less than $ 3,000 from new all-time highs.
On the derivatives issue, funding rates on exchanges have also cooled since last week, bringing relief to those concerned about an unsustainable hike leading to a dip to the top.
ETFs are "smart", but not for everyone
Love it or hate it, this week is all about the Bitcoin ETF.
As rumors of a US regulatory green light began to circulate late last week, Bitcoin's price action heated - and it seems that this week the trend will continue.
After years of rejections, the U.S. Securities and Exchange Commission is preparing to witness the launch of two ETF products both based on CME Group's Bitcoin futures.
These precede a lengthy decision-making process, which begins next month, regarding physical Bitcoin ETFs, those with real BTC as their underlying asset and which form the subject of real interest to analysts.
There is no guarantee that those traditional ETFs will be approved, and there are concerns already abound that the market may end up disappointed once again.
However, with multiple applications to be decided, there are six months left for a breakthrough from the SEC.
Optimism that the tide will turn in favor of the crypto industry continues this week, as grayscale confirm that you will apply to convert your flagship Bitcoin fund product into an ETF.
stay tuned
- Barry Silbert (@BarrySilbert) October 17, 2021
Grayscale's fund, the Grayscale Bitcoin Trust (GBTC), has been a talking point in its own right in recent weeks, trading at a increasing discount to spot BTC amid fears that institutional clients are voting with their feet in the lead up to the ETF launch.
The higher fees of the former are an example of the competitive advantage debate, while some have pointed out that futures-based ETFs will not work as a suitable alternative by definition.
This chart shows why it is better to buy #Bitcoin than Bitcoin Future ETF. For investors, new Bitcoin ETFs can be more expensive than buying cryptocurrencies outright. Bitcoin Future has underperformed by 30 points since the inception of Bitcoin Future in 2017. https://t.co/1ZnVBJQlGa pic.twitter.com/oXrZ95Wsmg
- Holger Zschaepitz (@Schuldensuehner) October 17, 2021
โFor starters, most institutional players have direct access to CME futures. Typically, the main reason they would choose to trade ETFs rather than futures would be to avoid tracking error (against the spot price) of futures launch costs or price deviations from contango or backwardation. " cryptocurrency trading company QCP Capital added in a circular to Telegram channel subscribers on Friday.
โAs such, having the CME futures-based ETF nullifies the fundamental advantage of ETFs; to track the spot price as closely as possible. "
Difficulty set for a seventh consecutive increase
The fundamentals of the Bitcoin network continue to impress this week, and difficulty is leading the group.
What is arguably the most essential feature of Bitcoin is going from strength to strength and, on Tuesday, October 19, a seventh consecutive surge is forecast to seal. The last time it happened was in 2019.
That increase will bring the difficulty back to over 20 trillion for the first time since June.
This occurs despite some volatility in the hash rate, with Dear it is now back down to 123 exahashes per second (EH / s), having reached over 140 EH / s this month.
However, with the overall uptrend still intact, concerns are few and far between amid news that the US now offers a home for the the lion's share of the mining power of Bitcoin.
Supply shock predicts a "good year" in 2022
While Bitcoin price forecasts focus on what might be possible in the fourth quarter of this year, some are already looking further and using data to reach even more optimistic conclusions.
One analyst who paints an optimistic outlook for 2022 is Willy Woo, creator of the data resource Woobull and known for his research of the Bitcoin market cycle.
During the weekend, woo outstanding The growing scarcity of Bitcoin as a probable fuel for a sustained reduction in prices.
Historically, he noted, declining supply combined with more of that supply remaining in the hands of hodlers with no plans to sell creates a powerful bullish signal.
Its metric, "Long-Term Fork Supply Shock", clearly shows that such a scenario plays out multiple times throughout Bitcoin's history.
"The technical name for this graph is '2022 is going to be a good year,'" he summed up to Twitter followers.
As Cointelegraph reportedLong-term holders already control a near-record share of the BTC supply, raising expectations that the fight for the remaining coins will be hotter than ever.
This needs to be assisted when a physical ETF is approved, something that could happen as early as November and continue for several months.
The balance of BTC in the main exchanges tracked by CryptoQuant, meanwhile, it has settled at just under 2.4 million BTC after a precipitous drop in September.
The next Bitcoin bear market is coming
With so much excitement about the possible maximum price of Bitcoin this year and how high it could be, some analysts are already turning their attention to the other side: the bear market.
Related: Top 5 Cryptocurrencies to Watch This Week: BTC, ETH, SOL, MATIC, FTM
Historically, nothing goes up in a straight line and Bitcoin is no exception. Each halving cycle has experienced a price spike in the year after the block subsidy halving, followed by a mid-cycle floor price.
This cycle, say several well-known market participants, will be no different.
As such, a price spike will be followed by an extended decline, in line with 2014 and 2018.
For the popular Twitter analyst TechDev, this floor should nevertheless be an order of magnitude higher than the previous one: as much as $ 60,000 - but the process should already start before the end of 2021.
โI want a long cycle. Who does not? But nothing I've seen macro in terms of PA suggests that it will happen, "he said. warned followers on the weekend.
Look at your indicators. 2-week RSI channel, RVI 92-93. If they hit them, I stay out. Ignore them in the hope of a new paradigm and those who don't are likely to drop it. "
Of the various accompanying charts, one clearly showed how Bitcoin's Relative Strength Index over two-week time frames carefully captured each peak.
Twitter personality Rekt Capital also took the opportunity to remind followers and subscribers of the need to take time to make a profit.
"People think that BTC will never see another -80% bear market because it is now a conventional and too mature asset," he said. argument.
โLet's not forget that there was a -53% correction just a few months ago. The average bear market is -84.5% deep. One is very likely to occur after this bull market. "
Nonetheless, the weekend produced an upbeat forecast for the bear market, with Dan Morehead, CEO of Pantera Capital, claiming the channel would be "shallower" than the others.
As Cointelegraph reported, other measures point to the good times continuing into 2022, including for Bitcoin. Earlier this month, PlanB, creator of the flow-based stock-based Bitcoin price forecasting models, proclaimed that the bull run has in at least six months left to run.
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