Even if the futures market is biased, Bitcoin will break out this week. Contributed by a bitbank analyst

Virtual currency market prices this week from 12/16 (Sat) to 12/22 (Fri)

Mr. Hasegawa, an analyst at Bitbank, a major domestic exchange, illustrates this week’s Bitcoin chart and deciphers the future outlook.

1. Bitcoin on-chain data
2. bitbank contribution

Bitcoin on-chain data

Number of BTC transactions

Number of BTC transactions (monthly)

Number of active addresses

Number of active addresses (monthly)

BTC mining pool remittance destination

Exchange/Other services

bitbank analyst analysis (contributed by Tomoya Hasegawa)

Weekly report from 12/16 (Sat) to 12/22 (Fri):

Bitcoin (BTC) vs. yen has been trending steadily this week, and as of noon on the 22nd, the decline from the previous week has almost disappeared.

At the beginning of the week, Bitwise released a new TV commercial, and it was reported that BlackRock had compromised on the method of creating and redeeming ETFs using cash, stirring up market expectations for early approval of a spot-based Bitcoin ETF. , BTC returned from the 5.8 million yen level to the 6.2 million yen level.

As a result, the market price recovered to $43,000 in dollar terms, and then pushed to around 6 million yen due to long loss cuts due to profit-taking selling. On the same day, the market price recovered to 6.3 million yen.

However, when the US Consumer Confidence Index for December announced on that day was higher than market expectations, the market stalled. After that, the price tried to maintain the 44,000 dollar level, or 6.27 million yen, but was pushed down by profit-taking selling and struggled to break above the same level.

Figure 1: BTC vs. Yen chart (1 hour timeframe) Source: Created from bitbank.cc

Although the US Consumer Confidence Index showed an upward trend, the Fed Funds interest rate futures market continues to factor in interest rate cuts starting in March next year, so there was no major impact on the market’s interest rate outlook.

On the 22nd, US time, November data for the personal consumption expenditure (PCE) price index, which the US Federal Reserve (FRB) pays attention to as an inflation indicator, will be released, and the market is predicting a slowdown in growth compared to the same month last year. It is expected.

If we follow the theory, the slowdown in the growth of the PCE price index is a positive for the BTC market, but recently, factors have emerged that could put pressure on the market’s top price. In the BTC futures market, the price of futures expiring in three months is significantly higher than the spot price, and the funding rate (fr) of perpetual futures has also reached its highest level in November. This suggests that futures market positions are heavily tilted toward long-hold positions (Figure 2).

Figure 2: BTC vs. Yen, BTC futures funding rate, 3-month BTC futures price deviation rate Source: Created from bitbank.cc, Glassnode

This means that in the futures market, it has been pointed out that there is a lack of buying power and a decrease in short positions, which are the fuel for a rise in the market, making it difficult for the BTC market to move upwards.

In the options market, open interest is concentrated around the $45,000 strike, so if the market succeeds in breaking out above $44,000, the market will be drawn to the milestone level through spot buying or long futures as a result of negative gamma hedging. It is possible, but considering the current state of the futures market, will it be difficult for the price to break out above $45,000?

It has been pointed out that many market participants in the US are on year-end vacation starting this week, and if the price does not succeed in breaking out above the $45,000 level this week, it will be difficult for the stock price to reach $50,000 by the end of the year.

Contributor: Tomoya HasegawaYuya Hasegawa

After graduating from a British graduate school, he worked as an analyst for the FinTech industry and virtual currency market at a venture company made up of people from financial institutions. Since 2019, he has been a market analyst at BitBank Co., Ltd. He has provided comments to major domestic financial media and has contributed to many overseas media.

connection:bitbank_markets official website

Previous report:Bitcoin is on a correction trend, does it need more material to break above $45,000?

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