Biggest GBTC Discount Ever – 5 Things To Watch In Bitcoin This Week

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Bitcoin (BTC) is starting a new week with analysts looking for a bottom – but that may not mean a dip to $ 40,000 or less.

After a mundane weekend, Bitcoin bulls are now facing yet another week of bearish sentiment in the global economy as risk appetite remains lukewarm.

Amid the lack of a “Santa Gathering” for pretty much everyone, there appear to be few triggers to help BTC / USD return higher in time for the New Year. At the same time, chain measures remain strong and miners refuse to spend.

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

$ 50,000 seems a long way off for Bitcoin bulls

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

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

Buying occurs, especially among smaller retail investors, but for seasoned market participants, lower levels are likely.

For the popular trader Pentoshi, these could nevertheless avoid a new test of $ 40,000. In a tweet on Sunday, he highlighted the major Bitfinex exchange and its large trading volumes as a likely source of support.

“Finex is making the highs and lows on $ BTC. Believe it is a similar situation where they will just absorb sales at those key levels. See September after 40.7k down, ”he wrote, referring to the market events of late September.

“Now looking for a 42-46k lower imo.” 1 hour BTC / USD candle chart (Bitstamp). Source: TradingView

Others were more bullish, with a fellow Galaxy trader calling for an altcoin-led “green week”.

With ten days left of the year, a surprise ending until 2021 is also not universally excluded when it comes to the crypto markets.

In its latest market update, the Decentrader trading platform showcased Bitcoin’s Advanced NVT indicator as a possible stepping stone to higher price points.

Still at its lowest, the historical cycle metric could still surprise traders, having almost hit its lowest level of “overbought” ever.

“Will we see the same thing this time with a bounce and rally over the Christmas break?” Or will we see more profit taking at the end of the year? »Summary update.

“Right now, the $ BTC is at a key decision level, so it would certainly be wise to manage your risk carefully until a clear trend emerges.” NVT Advanced Bitcoin signal graph (light blue). Source: LookIntoBitcoin.com Miners continue to linger

A cohort of Bitcoin hodlers not in the mood to sell at current prices are the miners, whose exits hit their lowest level in three months.

According to data from Glassnode, miner exits have almost halved in just over a month, reiterating the reversal in market dynamics from historic highs.

A similar dramatic drop occurred in September, with spot markets then reaching a low two weeks later. This month’s action therefore has a historic precedent.

1 hour graph of Bitcoin miner exits (7 day moving average). Source: Glassnode / Twitter

Other data shows unspent supply is set to hit all-time highs, the culmination of a downward trend in miners that began in 2020.

In other words, miners are in no rush to spend their block grants once a new block is successfully mined.

The unspent supply of #Bitcoin miners currently sits just $ 500 BTC below the ATH.

These coins are given to miners as a reward for resolving a block, but have never been spent on a chain.

Miners started HODLing a lot more $ BTC since March 2020.

Live graph: https://t.co/D2jZTD0O52 pic.twitter.com/vJy1G41Xvf

– glassnode (@glassnode) December 20, 2021 Macro trades 21 month bull run against volat

Macroeconomic volatility is expected to continue into 2022 in a trend that is confusing investors, sources are warning this week.

Much like Bitcoin, an unexpected bearish episode means the fourth quarter of this year could end in a whimper and rob the market of its classic “Santa rally”.

The fault is both the coronavirus and the political unrest in the United States, the latter coming in the form of a senator rejecting President Joe Biden’s beleaguered $ 2 trillion spending program.

Stocks in Asia fell that day and before the US opened the mood was cautious.

“Investors must be prepared for Covid to continue to be a primary driver of market performance through 2022,” Robert Schein, chief investment officer at Blanke Schein Wealth Management, told Bloomberg.

“After the bull run we have seen over the past 21 months, investors are not as accustomed to prolonged periods of volatility.”

Schein was referring to the comeback seen in global markets since March 2020, when a cross-market crash also took Bitcoin to a low of $ 3,600.

Amid all this, the US dollar is making a comeback – a potential new headwind for BTC, which has traditionally been inversely correlated with the greenback.

The U.S. Dollar Index (DXY), which measures the strength of the dollar against a basket of currencies of major trading partners, stood at 96.6 at the time of writing, having nearly hit 97 by the end of last week.

1-day candle chart of the US Dollar Currency Index (DXY). Source: TradingViewGBTC Reaches Biggest Discount Ever

Bitcoin under $ 50,000 should probably sound like a good deal for big investors, but one industry benchmark tells a different story.

The Grayscale Bitcoin Trust (GBTC), the largest institutional BTC vehicle, is currently trading at a discount of over 20%, data from on-chain analysis site Coinglass confirms.

GBTC vs. assets vs. GBTC premium graphics. Source: Coinglass

GBTC, which plans to convert next year to a Bitcoin spot-price exchange-traded fund (ETF), has seen major changes in market behavior in the second half of 2021.

As Cointelegraph reported, after spending the first part of its life trading at a high premium, the investment fund is now offering institutional buyers what is de facto a “bargain basement” BTC.

At 22.95% as of December 18, the discount has never been greater – a curious phenomenon indicating what some argue is an even more curious lack of demand for GBTC stocks.

How can Bitcoin be ready to go all the way into a top run when you can currently buy GBTC stocks, backed by physical BTC, at a 17% discount and no one is interested … ask for a friend

– TonaldDusk (@tonald_dusk) December 13, 2021

Regulatory uncertainty surrounding spot ETFs remains a topic of discussion for the United States As only futures have been given the green light this year, the industry continues to rally to the issue, arguing for a change in 2022 .

The main US exchange Coinbase last week approved GBTC’s conversion plans.

“GBTC shares can be traded at premiums or discounts relative 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 with a premium to its net asset value of up to 142% and a discount to its net asset value of 21% “, a dedicated letter to the Securities and Exchange Commission lit.

“If Arca’s proposal is approved, GBTC will be able to use ETP mechanics that minimize variations between its stock prices and the net asset value (‘NAV’) of its Bitcoin holdings, and therefore US retail investors will be able to access the Bitcoin market through the familiar ETP structure and at trading prices that remain more closely aligned with Bitcoin’s spot trading prices.

Spot-based is already operating with huge success across the border in Canada, as well as in Europe and elsewhere.

Cold feet freeze

Not much has happened over the weekend when it comes to spot price action, but that’s little consolation for nervous traders.

Related: Happy ‘bearday’, Bitcoin: It’s been 3 years since BTC hit $ 3.1,000

Sentiment around crypto is weaker than ever, according to the Crypto Fear & Greed Index.

Continuing its crisscrossing trend, the index is back in the “extreme fear” zone since Monday, failing to even crack the 30/100 throughout December.

For comparison, at a record high of $ 69,000 on November 9, Fear & Greed measured 84/100 – “extreme greed.”

However, as popular trader and analyst Rekt Capital often repeats, such extreme fear “precedes financial opportunity.”

“This current BTC downtrend channel reminds me of the BTC downtrend channel formed in May,” he added on Sunday, referring to the events after the ban on mining in China when BTC / USD went down. is reversed by 50% and Fear & Greed has repeatedly bottomed out at 10/100.

After this trough structure and consolidation, it only took a month for the index to return to the “extreme greed” zone.

Crypto fear and greed index. Source: Alternative.me

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