New BTC miner capitulation? 5 things to know in Bitcoin this week


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Bitcoin (BTC) prepares to end a tough November just above $16,000. What’s on his BTC price menu for the week?

Bitcoin is nowhere near out of the woods after falling more than 20% this month in what analyst Willie Woo has called “unprecedented deleveraging.”

The impact of the FTX implosion remains unknown and warning signs continue to roll in after the first wave of bankruptcies in the cryptocurrency business.

This week, in particular, we are looking at miners whose profits are being squeezed by falling spot prices and soaring hashrates.

A cataclysm is in the works and another “surrender” among miners could bring further shocks to the entire ecosystem.

With “maximum pain” looming for the average hodler, Cointelegraph looks at some of the key factors impacting BTC/USD in the short term.

Bitcoin Miners Will ‘Surrender’ — Analyst

Like everyone else, Bitcoin miners are under a lot of pressure when it comes to selling their accumulated BTC for a profit.

We don’t yet know how much financial pain the average miner is in, but one of the classic indicators is preparing to call ‘surrender’ again.

Only a few months after the last such period, hash ribbon It warns that the situation is becoming unsustainable again.

Hash Ribbon uses two moving averages of hash rates to infer conclusions about miner participation in the Bitcoin network. Trend line crossovers indicate yield and recovery periods.

For Kripto Mevismi, contributor to on-chain analytics platform CryptoQuant, the time is approaching for the former to reappear.

“What this means is that Bitcoin is currently very difficult for miners, which means the costs are getting higher and higher, making it more and more difficult to do business in this kind of environment.” I have written In a blog post:

“That’s why miners don’t work at full capacity. If they have efficient new generation mining machines, they run them, but that’s it. The price of bitcoin is falling and mining is becoming more expensive and difficult, making it a tough environment for miners.”

Bitcoin hash ribbon chart. Source: LookIntoBitcoin

Kripto Mevismi added that a drastic change in mining difficulty could improve the situation.

Estimate As of writing from BTC.com for the next adjustment on Dec. 6, the difficulty drop was 6.4%. If done, it would be the biggest drop since July 2021.

BTC.com and others similarly estimate that hashrates are dropping from record levels as miners scale back operations.

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

BTC/USD Heads Volatility To Monthly Closing

BTC/USD managed to stave off heavy weekly losses at the most recent candle close on November 27th.

Data from Cointelegraph Markets Pro and TradingView indicate.

BTC/USD 1-week candlestick chart (Bitstamp).Source: Trading View

The lack of volatility that characterizes intraday price action has left traders and analysts cautious about their next steps.

“It’s the weekend of the holidays, so expect something interesting going into the weekly and monthly results.” On-chain analytics resource Material Indicators I have written Part of last week’s tweet.

Subsequent posts repeated The November 30 close is likely to trigger renewed volatility, with BTC/USD currently down 21.25% since the beginning of the month.

This makes November 2022 Bitcoin’s worst November since the bear market year of 2018. Coinglass data Confirm.

BTC/USD monthly return chart (screenshot).Source: Coinglass

Meanwhile, on a shorter timeframe, popular trader Crypto Tony highlight $16,000 is a key zone for a reversal towards higher levels with the long-term trend in mind.

BTC/USD annotated chart. Source: Crypto Tony/ Twitter

“Drop highs and break below key resistance zones. If you want to enter safely, wait for a reversal of lows,” he said. wrap up On the weekend.

BTC/USD annotated chart. Source: Crypto Tony/ Twitter

As Cointelegraph has reported extensively, Bitcoin’s next bear market bottom is a point of contention at the moment, with certain targets more popular than others.

Crypto’s Il Capo reiterated his opinion that BTC/USD could be next at $12,000.

highlight On the relationship between perpetual futures trading volume and spot prices, he warned that the current market structure does not support further gains.

“There is likely to be 12,000 to 14,000. Altcoins will drop 40 to 50%,” he stressed.

Beneath the Bitcoin Sea, Hodlers Gather

Bitcoin ecosystem populations, both large and small, are “aggressively” adding BTC exposure this month.

Accumulation appears to be accelerating as a silver lining of future supply crunch, when demand faces much of illiquid supply.

According to on-chain analytics firm Glassnode, retail investors are the main driver of the current trend.

There is an increasing number of small investors called “crabs” or “shrimp” depending on their wallet balance.

“Bitcoin Shrimp (< 1$BTC) has added 96.2k $BTC to holdings since FTX collapsed. which represents 6.3% of the circulating supply,” said Glassnode. Indicated In a Twitter thread about this phenomenon.

Bitcoin Evidence position change chart. Source: Glassnode/ Twitter.

A further post states:

“Crab (up to 10 $BTC) also saw positive balance growth of 191.6k $BTC over the last 30 days. We are above the peak of the month.”

Net position transition chart of bitcoin “crab”. Source: Glassnode/Twitter

As Cointelegraph reported, part of the decline in wallet numbers could be attributed to exchange users withdrawing funds to private storage.

Wu flags inbound ‘greatest pain’

For Willy Woo, an analyst at popular statistical resource Woobull, on-chain indicators show that Bitcoin’s next macro bottom is imminent.

Highlighting three of them this weekend, Woo showed that, for all intents and purposes, Bitcoin is performing exactly as it did in its previous bear market pit. rice field.

For example, some of the BTC supply held at unrealized losses is approaching macro lows, a phenomenon covered by the “maximum pain” model.

“Bitcoin’s bottom is nearing below the Max Payne model. Historically, the price of BTC has reached macro cycle bottoms when 58% to 61% of the coin is under water (orange). The shade of green will be aligned with the coins locked within the GBTC Trust,” said Woo. explained along with the chart.

Bitcoin Max Pain Annotated Chart.Source: Willie Woo/Twitter

He went on to mention that the BTC/USD MVRV ratio value also targets the “buy” zone, historically giving investors the greatest profit potential.

MVRV is the Bitcoin market capitalization divided by the Realization Cap (the total price of each Bitcoin the last time it moved). The resulting figures provide buy and sell zones corresponding to extreme prices.

“The MVRV ratio is deep in the value zone,” explains Woo said:

“Under this signal, we were already bottoming out until the latest FTX White Swan debacle put us back in the buy zone (1).”

Bitcoin MVRV annotated chart.Source: Willie Woo/Twitter

Woo’s third chart, Cumulative Value Days Destroyed (CVDD), was recently featured by Cointelegraph.

“Use these charts at your own discretion. We are in a period of unprecedented deleveraging,” he added, adding, “Past cycles are not necessarily reflective of future cycles. No,” I warned.

Macro mood rocked by Chinese protests

Key economic data for the United States are: Deadline This week, crypto analysts focus more on China.

Some warn that global factory woes could destabilize market performance as an already fragile status quo hangs over inflationary trends.

In China, a wave of protests against the government’s policies on COVID-19 has swept in, with several cities calling for an end to “COVID Zero” in opposition to lockdowns.

With this in mind, risk assets can be a rough ride if circumstances spiral out of control.

“Bitcoin’s critical area was unbreakable, so we’re still consolidating within it. explained:

“If this loses, we can expect the market to see new lows, possibly depending on the China and FTX contagion this week.”

Even the mainstream media warned of the potential repercussions of the day. To tell Bloomberg said that “elevated contagion risk is profiled in the cryptocurrency complex.”

At the time of writing, Hong Kong’s Hang Seng Index and Shanghai Composite Index were down 1.6% and 0.75% respectively, while Asian stock markets were slightly lower on the day.

Hang Seng Index 1-day candlestick chart.Source: Trading View

Bonus: Bitcoin Bottom in Crude Oil

In a related macro note, Bitcoin is currently lining up to “outperform” in US dollar terms, says one prominent analyst.

RELATED: Bitcoin May Need Another $1 Billion On-Chain Loss Before New BTC Price Bottoms

From a WTI crude perspective, BTC price action is already at macro lows and history calls for a comeback, including a significant upward trend against the US dollar.

“We finally hit the bottom of the channel,” says TechDev Confirmed weekend:

“Bitcoin’s oil (energy) purchasing power peaked in April 2021. Now it looks poised for further outperformance (and US dollar appreciation).”

BTC/WTI annotated chart. Source: TechDev/ Twitter

The accompanying chart draws certain parallels with Bitcoin’s performance in the last bear market pit of late 2018.

Meanwhile, as Cointelegraph reported, TechDev isn’t the only call for the upside that will mark BTC’s price action heading into the new year.

The views, thoughts and opinions expressed herein are those of the author only and do not necessarily reflect or represent the views or opinions of Cointelegraph.