‘Resistance is futile’ — 5 things to watch in Bitcoin this week

Bitcoin (BTC) starts a new week with a high in more ways than one, as BTC / USD seals its highest weekly close.

After days of painfully slow progress, Bitcoin finally made a breakout move to the upside to pass crucial levels.

Now ready to start "parabolic, ”Some argue, the largest cryptocurrency is now firmly back on traders' radar after a week dominated by all-time highs in altcoins.

Will “Moonvember” start living up to its name? Cointelegraph takes a look at what could end up moving the market in the coming days.

Huge Futures Gap Opens As BTC Surpasses $ 65,000

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

As is often the case during bull runs, the pace of gains was rapid, and only one candle per hour saw $ 2,000 added to the spot price.

The timing was flawless, just before the weekly close approached and thus allowed a new high of $ 63,270 for the weekly chart.

It's going to be a great week

- Barry Silbert (@BarrySilbert) November 7, 2021

Unsurprisingly, the reactions were overwhelmingly positive as the higher short-term predictions returned.

"Resistance is futile," introduces podcast host Scott Melker. summarized along with a chart showing the trend breakout of Bitcoin.

Along with the weekly all-time high, another milestone occurred for the broader crypto market: the combined market capitalization of all tokens surpassed $ 3 trillion for the first time.

As Cointelegraph reported, optimism remains on the long-term potential of Bitcoin, and opinions are merging around the idea that most of the returns from this cycle are yet to come.

"People who think it's too late to buy BTC don't realize how much it can go up in this cycle," said popular analyst Rekt Capital. additional.

Meanwhile, Filbfilb, analyst and co-founder of the Decentrader trading platform, pointed out one of the few possible causes for correction in the form of the CME futures gap.

Given that markets on Monday will open considerably higher than where they closed on Friday, the potential for spot to briefly return lower to "fill" the resulting gap, in line with historical patterns - it remains.

"It seems quite optimistic, it could go back to the cme gap, but it looks like a fire in general," he told Telegram channel subscribers.

Funding grows as "extreme greed" awaits

Aside from the CME gap, another derivative track can put the cat among the pigeons in short periods of time.

Data At the time of this writing, financing rates on exchanges were shown heading into unsustainable territory.

While not quite as high as during the run to $ 67,000 or more in October, the highly positive funding often results in a price correction as traders become complacent in yearning for the market.

For analyst Dylan LeClair, however, this was of little concern as no signs of an increase in leveraged longs were evident.

"BTC + $ 2,000 for the last two hours without a big spike in futures open interest or funding perpetrated", saying Twitter followers.

“The current price action is the result of the exhaustion of spot sales and not the result of a sudden increase in leverage. No liquidity on the sell side = gap to the upside. "

Meanwhile, the mood for overall market sentiment is leaning towards "extreme greed", as measured by the Crypto Fear & Greed Index.

However, at 75/100, the index suggests that there are still at least 20 points left before the classic maximum conditions enter.

The miners aren't selling yet, here's why

With new all-time highs seemingly around the corner, Bitcoin miners continue to show solid resolve and "hodl", without selling their BTC.

Data from the on-chain analysis service CryptoQuant shows that the outflows of miners' portfolios, with few exceptions, have remained stable in recent weeks and months.

There may be a very good reason: since the May 2020 block subsidy halving, when miners' income in terms of BTC fell 50%, the USD value of their income has skyrocketed.

"Despite this reduction in BTC-denominated revenue, miners' revenue in USD increased 550% from the 2020 halving, and is approaching an ATH of $ 62M + per day," the firm said. of Glassnode analysis. commented on Monday.

An accompanying chart showed the extent to which miners are capitalizing on their positions and how hodl has been paid over the current four-year halving cycle.

As Cointelegraph previously noted, the behavior of the miners in the fourth quarter is very different from that of the beginning of the year.

Exits in the first quarter were considerably higher, despite BTC / USD trading at comparatively much lower levels than today.

The hash rate shows "sheer resistance"

Accompanying the bullish mood among miners is a corresponding "just up" narrative for the mining hash rate.

A measure of the processing power dedicated to maintaining the blockchain, the hash rate of the Bitcoin network continues to rebound by leaps and bounds from the turmoil caused by China's ban in May.

In record time, the metric has all but canceled the impact of the event as miners move to the US and elsewhere and existing operations increase their capabilities.

"The recovery after China's mining ban has highlighted the great resilience, robustness, and decentralized nature of the Bitcoin network for all to see," LeClair wrote on Twitter. comments.

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

Beyond hash rate, network difficulty remains set for more profit after seeing eight consecutive increases in a row.

In five days, at current prices, the difficulty will increase approximately another 3% to 22.33 trillion - approaching all-time highs since before the China debacle.

Concern about inflation due to expired CPI data

Inflation remains the name of the game in macro markets in what remains a beneficial headwind to Bitcoin's appeal as a hedge.

Related: Top 5 Cryptocurrencies to Watch This Week: BTC, DOT, LUNA, AVAX, EGLD

With US consumer price index (CPI) data to be released this week, expectations are that the "disconnect" between projections and reality will widen.

The Federal Reserve, which recently indicated reduce asset purchases, might even be forced to change course due to the current environment, one analyst saying Bloomberg.

"We see upside risk in both CPI numbers and as a result there is a risk that the Fed will accelerate the pace of asset purchases," said Citigroup Senior Investment Specialist Mahjabeen Zaman.

As Cointelegraph previously mentionedThe CPI itself is a poor measure of inflation, as it excludes many of the assets that are experiencing the largest increase in value and price.

This has led to calls for Bitcoin adoption to preserve the purchasing power of both individual savers and cash-rich corporations, and was a key factor in MicroStrategy's decision to convert large portions of its balance sheet into BTC.