5 factors Bitcoin investors should watch this week

Bitcoin (BTC) started the new week around $40k and with serious obstacles to rise further.

BTC / USD parity, which went up to $ 42,500 at the weekend, declined to $ 40 thousand at the beginning of the week. So what’s next?

Cointelegraph took a look at five factors that could influence Bitcoin price action in the coming days.

Bitcoin rises as dollar stagnates

Stock markets and the dollar continue to drift away from predicted behavior patterns for Bitcoin.

Bitcoin experienced a serious rebound after China targeted big tech companies last month, but stock markets were late in regaining their lost value.

While tensions continued in China, the US markets started to rise again. As a result, the dollar fell behind its rivals, contrary to expectations.

Bitcoin Price Index: How much is 1 Bitcoin? (BTC TL)

The US Dollar Index (DXY), which was 93 points a week ago, decreased to 92 points as of the time of translation.

Analyst Crypto Ed thinks DXY should rise to 94 points before turning to the downside and then decline, giving Bitcoin an opportunity to rise. In the current situation, it can be seen that the realization of these conditions is quite difficult.

1-day candlestick chart of the US Dollar Index (DXY). Source: TradingView

Over-the-counter activity draws attention

Bitcoin’s rally in the past seven days has focused attention on one group of investors in particular: large-volume buyers and sellers who trade over-the-counter (OTC).

While there was an increase in the activities of individual investors, it was the big players that attracted the attention of the analysts.

The rapid decline of exchanges’ BTC reserves has led to rumors that institutional investors are starting to buy back the Bitcoin supply.

Over-the-counter activity, however, began to give distress signals towards the end of the week. Data from giant derivatives platform FTX shows that investors are positioned around the expectation of a price drop. Popular investor Pentoshi thinks this is related to the cryptocurrency tax bill, which is expected to be approved by US lawmakers this week.

On-chain analytics resource CryptoQuant, In his post on Monday “Yesterday, $131 billion worth of BTC was moved, but only 1 percent of them were transactions from exchanges. The fund flow rate of all exchanges hit the lowest level in the last two years,” he said.

“This reveals the scale of over-the-counter BTC activity by major players.”

Bitcoin funds flow rate chart of all exchanges. Source: CryptoQuant

Hash rate and difficulty gain strength

According to the latest data, the fundamentals of the Bitcoin network are giving signals that the uptrend will continue.

Difficulty, one of the network’s key indicators, corrected positively last weekend for the first time since the price crash in May, up 6 percent. This increase is expected to continue in the next autocorrect in 11 days.

The confusion caused by China among miners seems to have eased as these miners move to new regions.

Bitcoin difficulty chart. Source: Blockchain

The hash rate is also showing signs of improvement. The hash rate rose above 100 EH/s for a short time last weekend, according to estimates.

Asset manager Travis Kling said, “It is unbelievable that the Bitcoin hash rate has experienced the biggest drop in history and the price has skyrocketed 40 percent in 10 days.” he summed up.

The hash rate reached up to 168 EH/s at its peak level and regressed to 83 EH/s with the decline originating from China.

GBTC FUD is finally over

Apart from the events originating from China, one of the topics of discussion that has lost its importance this week seems to be the unlocking events of the Grasycale Bitcoin Trust (GBTC).

The unlock dates of the stocks caused controversy among the mainstream financial establishments, who thought that the BTC price would drop further.

However, most of these dates have passed and did not affect the price as expected. Even GBTC itself is increasing its real-time market value.

The price difference of the fund, which decreased to -6 percent at the weekend, increased to 0 again as of the translation publication time, revealing this situation.

GBTC price differential chart. Source: Bybt

No room for ambition yet

Bitcoin’s drop from $42,000 has had a calming effect on market sentiment.

According to the Crypto Fear & Ambition Index, a drop below $40,000 has eliminated the greed in the market.

The index, which was in the greed zone on Sunday, fell to 48/100 points, which is considered the “neutral” zone, on Monday.

On the other hand, 40 thousand dollars is not lost. BTC/USD is still hovering around this level at the time of translation and is struggling to turn it into support.

Crypto Fear & Ambition Index. Source: Alternative.me

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