The largest cryptocurrency managed a weekly close just below $21,000 on Nov. 6 — an impressive multi-week high — but remains fixed in a sticky trading range.
Despite seeing highs of nearly $21,500 over the past week, there has yet to be a catalyst capable of breaking the market status quo, but the coming week has as good a chance as any of doing so.
Nov. 10 will see key United States inflation data for October released, while jobless claims and multiple speeches from Federal Reserve officials may also impact risk asset volatility.
Bitcoin reacted in line with market sentiment overnight, but going forward, will the debacle prove any more than classic crypto FUD?
FTX worries disrupt weekly close
While falling into the weekly close, BTC/USD still managed to post its highest such weekly candle close since mid-September.
With that, Bitcoin defends its trading range and avoids any noticeable break of its current paradigm — lurching between $19,000 and $22,800 since August.
“As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT),” Binance CEO, Changpeng Zhao (also known as “CZ”) wrote in a Twitter thread.
“Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books.”
“We’re grateful to those who stay; and when this blows over we’ll welcome everyone else back,” he wrote in one optimistic post to followers overnight.
The market reaction has so far been less positive; a look at the top ten cryptocurrencies by market cap shows 24-hour losses on some tokens nearing 10% at the time of writing.
For Bitcoin traders, it is time to take advantage of the retracement in a week they believe should result in further upside.
“Lost lower time frame support. Nice little pullback. Will be looking to re-long when it finds it’s next support,” popular trading account IncomeSharks wrote in an update.
A separate post focused on potential cross-crypto gains.
“Total marketcap looking great on the daily. Bull or bear, I think there’s enough people still sitting on cash to push up to 1.5 trillion,” it read.
Michaël van de Poppe, founder and CEO of trading firm Eight, also said that he would be looking for “buy the dip opportunities” across crypto in the short term.
A classic counter-perspective came from fellow trader Il Capo of Crypto, who argued that $21,500 will mark the high point in a downtrend set to continue.
CPI and U.S. midterms in focus
The Federal Reserve dominated the last week of October when it came to crypto-asset performance thanks to its decision to raise interest rates by another 0.75%.
As this is implemented, markets will be watching another key figure this week — Consumer Price Index (CPI) data for October.
Any lower-than-expected CPI readout could be a boon for crypto and riskassets, as it notionally increases the chances of the Fed pulling back on rate hikes sooner.
Before CPI and jobless claims, however, there is the issue of the U.S. midterm elections to deal with — a potential source of volatility in and of itself.
“Personally, I am in no rush just yet to start buying,” well-known social media personality @CryptoGodJohn told followers.
“CZ vs SBF drama, Midterm elections Tuesday, CPI Thursday. This will be the biggest week of crypto that will set the tune for the end of the year.”
The rate hike announcement was something of a fake tone-setter, having sparked volatility which canceled itself out within days.
Fellow commentator Capital Hungry meanwhile warned of the impact of stronger CPI inflation:
“If US CPI this week is still high we are going to see that upside on gold reversed, USD strength back and Equities bears back in play.”
The U.S. dollar index (DXY) was making up for lost ground at the time of writing, having seen a dramatic 2% daily decline on Nov. 4.
Funding rates run hot
In a warning signal to bulls — and particularly late longs — Bitcoin funding rates are surging on derivatives exchanges.
As noted by Maartunn, a contributor to on-chain analytics platform CryptoQuant, funding rates are now at their highs in six months.
Funding rates are a mechanism used in perpetual contracts to keep their price close to the Bitcoin spot price.
The effect can be detrimental, as a price decrease ends up liquidating large numbers of overly bullish positions.
“And at this moment, Funding Rates are very high. Traders are betting on higher prices and are willing to pay a serious amount of interest,” Maartunn explained alongside CryptoQuant data.
“That doesn’t have to be bearish perse, but when price start to move against them they might be forced to get out their position or it will be liquidated.”
Maartunn added that funding was “something to keep an eye on in the coming days.”
Miners miss out on difficulty readjustment
Bitcoin’s network fundamentals remain in an interesting, if not wholly bullish state.
The latest data from on-chain monitoring resource BTC.com confirms that network difficulty decreased by 0.2% on Nov. 7 — far less than previously estimated.
The result has implications for miners, who have seen profits squeezed even as hash rate hits new all-time highs.
A major difficulty decrease would have helped level the playing field for some, and its absence keeps up pressure on certain players.
The Bitcoin Yardstick continues to edge further into its “cheap” zone this month, having seen rare lows.
Sentiment gauge hits three-month high
It might not all be doom and gloom for crypto market sentiment.
Fear & Greed, which measures sentiment with a normalized score of 0-100 using a basket of factors and offers various labels — extreme greed, greed, neutral, fear and extreme fear — to categorize them, reached its highest since mid-August at the weekend.
At 40/100, the optimism proved unsustainable thanks to the market retracement into the new week, and as of Nov. 7, 33/100 is in place — firmly within the “fear” bracket.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.