Market Analysis

Biggest GBTC discount ever — 5 things to watch in Bitcoin this week

Uncertainty across the board means an unusual end to a bull market Q4 for Bitcoin this year, but a price floor may be closer than many think.

Bitcoin (BTC) starts a new week with analysts looking for a bottom — but one which may not mean a dip to $40,000 or lower.

After an unremarkable weekend, Bitcoin bulls now face a fresh week of bearish sentiment across the global economy as risk appetite stays tepid.

Amid the lack of a “Santa rally” for practically anyone, there seem to be few triggers to help BTC/USD return higher in time for the new year. At the same time, on-chain metrics remain strong, and miners are refusing to spend.

With Christmas almost here, Cointelegraph takes a look at what to look out for this week when it comes to assessing where Bitcoin may be headed.

$50,000 seems far away for Bitcoin bulls

Bitcoin failed to produce any significant moves over the weekend, but now, attention is turning to a potential volatile “bottoming” for the market.

At $46,000, BTC/USD remains firmly entrenched in a familiar range, with bulls failing to find the momentum for a fresh attack on the $50,000 mark.

Buying is occurring, particularly among smaller retail investors, but for seasoned market participants, lower levels are likely.

For popular trader Pentoshi, these could nonetheless avoid a retest of $40,000. In a tweet Sunday, he highlighted major exchange Bitfinex and its large-volume traders as a likely source of support.

“Finex makes the tops and bottom on $BTC. Believe this is a similar situation where they will just absorb selling at these key levels. See Sep post 40.7k bottom,” he wrote, referencing market events from the end of September.

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Macro swaps 21-month bull run for volatility

Macro volatility is set to continue into 2022 in a trend which is unsettling investors, sources warn this week.

Just like Bitcoin, an unexpected bout of bearishness means that Q4 this year may end with a whimper and deny the market its classic “Santa rally.”

At fault are both the Coronavirus and U.S. political turmoil, the latter coming in the form of one senator rejecting President Joe Biden’s embattled $2 trillion spending package.

Stocks in Asia fell on the day, and ahead of the U.S. open, the mood was cautious.

“Investors should be prepared for Covid to continue to be a main factor in market performance heading into 2022,” Robert Schein, chief investment officer at Blanke Schein Wealth Management, told Bloomberg.

Regulatory uncertainty surrounding spot-based ETFs remains a talking point for the U.S. As only futures-based products received the green light this year, the industry continues to rally around the issue, arguing for change in 2022.

Last week, major U.S. exchange Coinbase endorsed plans for GBTC’s conversion.

“GBTC shares can trade at premiums or discounts to its net-asset value (i.e., the value of the Bitcoin it holds). Such premiums and discounts can be dramatic: GBTC has traded over-the-counter at a premium to its net-asset value that has ranged as high as 142% and a discount to its net-asset value of 21%,” a dedicated letter to the the Securities and Exchange Commission reads.

“If Arca’s proposal is approved, GBTC will be able to use the ETP mechanics that 4 minimize the variations between its share trading prices and the net-asset value (‘NAV’) of its Bitcoin holdings, and as a result, U.S. retail investors will be able to gain access to the Bitcoin market through the familiar ETP structure and at trading prices that stay more closely aligned with spot Bitcoin trading prices.”

Spot-based already operate with huge success over the border in Canada, as well as in Europe and elsewhere.

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Cold feet freeze over

Not much may have happened over the weekend when it comes to spot price action, but that is little consolation for nervous traders.

Related: Happy ‘bearday,’ Bitcoin: It’s been 3 years since BTC bottomed at $3.1K

According to the Crypto Fear & Greed Index, sentiment around crypto is as weak as ever.

Continuing its crisscrossing trend, the Index is back in the “extreme fear” zone as of Monday, having failed to crack even 30/100 throughout December.

For comparison, at the all-time highs of $69,000 on Nov. 9, Fear & Greed measured 84/100 — “extreme greed.”

As popular trader and analyst Rekt Capital often reiterates, however, such extreme fear “precedes financial opportunity.”

“This current BTC downtrending channel reminds me of the downtrending channel BTC formed in May,” he added Sunday, referencing the events after the China mining ban when BTC/USD reversed 50% and Fear & Greed bottomed multiple times at 10/100.

After that bottoming structure and consolidation, it took just a single month for the Index to return to the “extreme greed” zone.

Biggest GBTC discount ever — 5 things to watch in Bitcoin this week

Crypto Fear & Greed Index. Source:

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