BTC Matrix Breaks Out of Capitulation – 5 Things to Know in Bitcoin This Week

Bitcoin (BTC) starts the last week of January in fine form after posting its highest weekly close in five months.

Despite the opposition, the biggest cryptocurrency is maintaining its new strength and surprising market participants.

That’s no mean feat—market sentiment is enough to scare it off and cause a rethink among investors. Macro conditions are uncertain, while within Bitcoin, research has highlighted wheels on exchanges that are potentially artificially moving prices with huge amounts of liquidity.

After all, Bitcoin has seen its most impressive percentage gain in a year, and hopes remain that the good times will continue. What could it depend on?

Cointelegraph takes a look at some of the key factors to keep in mind as January is unlike any other closing time.

Bank on “Continued” for Bitcoin Analyst to come

It’s no secret that Bitcoin is experiencing this. Fair share of doubt Because it provides 40% profit on just three weekly candles.

Calls for a major correction and continuation of the bear market have long been public, and some more conservative trading voices insist that the macro lows are not yet over.

However, this inflection point is not yet complete. At its latest weekly candle close, BTC/USD traded above $22,700, marking its best performance since last summer.

After that, the pair strengthened at the start of Monday, as well as maintaining the ground recovered during the week.

Trader Credible Crypto, “Blowing down, juicy highs up, would be the best time to put in a nice flat before the continuation.” Abstract About the short-term perspective.

Credible crypto is characterized by a slightly more bullish market, less concerned with the idea that the whole move could just be a relief rally in a broader bearish structure.

“Total market capitalization broke through the 200-day EMA,” similarly optimistic Michael Van de Pope, Cointelegraph contributor and CEO of trading firm Eight. added At the end of the week, referring to the moving average

“Good signs for crypto, as continuation looks likely. Continuation to $25K in the middle or correction to $19.5K. To continue -> Hold above 200-Day EMA and break resistance. 200-Day EMA potential entry point.

The 200-day EMA was $21,056 at the time of writing, according to data from Cointelegraph Markets Pro And Trading View.

BTC/USD 1 day candle chart (Bitstamp) with 200EMA. Source: TradingView

A more conservative assessment of the situation, among other things, on the structure of the swap order book.

In their latest analysis, Material Indicators noted the ups and downs in BTC price action as the bulk of bid liquidity came and went on Binance.

“BTC buy wall at 20,200 has been moved to test resistance at the trend line to push the price higher,” part of the commentary. described.

“I don’t trust this entity at $22k as much as I did at $20k, but happy to trade after that.”

BTC/USD order book data (Binance). Source: Material Indicators/Twitter

Another post doubled down on the previous claim that there was price action. Being “choreographed”. And paying no attention to the surrounding industry news, most notably the bankruptcy of crypto lending firm, Genesis Trading.

“Fundamentally nothing has changed, yet BTC is testing macro-level resistance. Meanwhile, some major crypto institutions are headed for bankruptcy. Probably nothing,” material hints. Tweeted.

Macro-optimism is returning.

Macro analysis reveals a similar divide among those involved in the crypto markets themselves.

With the United States Federal Reserve’s latest decision to raise interest rates on February 1, sources are increasingly reading falling inflation in different ways.

Meanwhile, 2023 World Economic ForumDespite some crypto opposition, sentiment failed to take off significantly.

For Dan Tapiero, founder and CEO of 10T Holdings, it’s just a question of how quickly the Fed risks changing assets as it loosens monetary policy in the future.

How will the Fed respond when inflation drops below 0? A long good year ahead for BTC ETH Gold. told Twitter followers

USD bear mkt to support key trends and 10yrs below 3%. The digital asset ecosystem (DAE) will continue to thrive as clearing prices are reached without government support. Free markets work!

This position stands in stark contrast to some other popular takes, notably last week’s predictions by former BitMEX CEO, Arthur Hayes. The Fed pivots on rates, that warnedThe recovery will come with serious losses for crypto before it begins.

In the meantime, crypto cred also sees no reason not to be bullish on risk assets.

“Talks of rate hikes slowing to 25 basis points as inflation eases for 6 consecutive months, meanwhile $SPX has painted a perfect picture of the previous ATH and looks poised to bounce back. All this panic and fear, for what?” inquired January is 23.

S&P 500 Annotated Chart. Source: Credible Crypto/Twitter

Meanwhile the last week of the month contains various potential short-term market triggers in the form of US macro data releases.

These include GDP growth on January 26 and the Personal Consumption Expenditure (PCE) index on January 27.

DXY is nowhere to be seen as supported

On a related macro note, particular attention should be paid to the fortunes of the US dollar this week.

With crypto markets booming, the dollar’s strength continues to decline, rapidly losing ground Twenty years high last year.

The US Dollar Index (DXY) is generally inversely related to the performance of risk assets, and Bitcoin has shown itself to be particularly susceptible to big moves.

Currently, the DXY is trading near 101.7, having tested 101.5 — above a six-month low — for the second time this week. After losing it as support in late November, the index’s 200-day moving average has acted as resistance.

“It doesn’t take much to tell you what’s next, the biggest short squeeze market ever is upon us,” entrepreneur and crypto observer “Kush” Aleemzadeh said. Announcement With charts comparing DXY’s performance to Bitcoin and Nasdaq over the weekend.

The dollar’s decline against Chinese bonds also caught the attention of popular analyst TechDev, who Shown The move follows a Bitcoin top-out within a year of a key level break on Chinese ten-year bonds.

“New multi-month lows for the US dollar index DXY after a complete rejection above the horizontal support/resistance range and 200-day moving average cloud,” Caleb Franzen, senior market analyst at Cubic Analytics. added.

“That rejection was the moment I realized and accepted that momentum was biased toward the downside.”

US Dollar Index (DXY) 1-day candlestick chart with 200MA. Source: TradingView

On-chain matrices emerge from the abyss.

Bitcoin is truly in the midst of a renaissance, with on-chain data culminating.

Compiled by an analytics firm. Glass nodeSeveral classic indicators of Bitcoin market health are now breaking out of their capitulation zones.

These include – perhaps surprisingly given the 40% upside move this month – the amount of BTC supply held at profit and loss.

Net Unrealized Profit/Loss (NUPL) is now off its lows and on the way to better profitability, despite not being particularly low during the troughs of previous bear markets.

Bitcoin Net Unrealized Profit/Loss (NUPL) Chart. Source: Glass Node

As Glassnode confirms, this applies to Short Term Holder (STH) and Long Term Holder (LTH) NUPL. Two classes of Bitcoin investors are defined as institutions holding coins for less than or more than 155 days, respectively.

Similarly bullish is Bitcoin’s Market Value to Realized Value Z-score (MVRV-Z), which “measures the ratio between the difference between market cap and realized cap, and the standard deviation of all historical market cap data, i.e. (market cap – realized cap) / std (market cap),” or “when Bitcoin is over/undervalued compared to its ‘fair value’.” As Glassnode explains.

MVRV-Z has now left its green “undervalued” zone for the first time since a brief spike in early November, also marking the first such move since the FTX rout.

“The MVRV Z-Score has just pulled itself out of the green accumulation zone,” said Philip Swift, co-founder of trading suite Decentrader. Confirmed Previous Week.

Bitcoin MVRV-Z Score Chart. Source: Glass Node

Bitcoin mining hash rate, difficulty at all-time high

It’s already time for another bitcoin network difficult adjustment, and this week should preserve current all-time highs.

Related: Bitcoin has new ‘big rally’ as RSI mimics 2018 market recovery

According to estimates from BTC.comthe difficulty will increase by about 0.5% in six days’ time.

An overview of the fundamentals of the Bitcoin network (screenshot). Source: BTC.com

This will add an extra cherry on top of the cake in the mining sector which is already in the midst of a huge influx. Despite recent low prices, competition among miners has intensified this month, putting pressure on those unable to keep costs to a minimum.

Glassnode also shows that, compared to thirty days ago, miners as a whole have less BTC. It was then that prices began to rise.

Bitcoin 30 Day Miner Net Position Change Chart. Source: Glass Node

Raw data from Mining Pool Status Meanwhile, it also puts Bitcoin’s hash rate — an estimate of the processing power dedicated to mining — at new all-time highs.

Bitcoin Hash Rate Raw Data Chart (Screenshot). Source: MiningPoolStats

The views, opinions and opinions expressed herein are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.