Data suggests traders view $46,000 as Bitcoin’s final line in the sand

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With the price of Bitcoin creeping closer to $46,000, many have been wondering when — if at all — will this level be seen as a bottom and what comes next. All eyes are on CNBC’s Fast Money trader panel for their latest thoughts on where we go from here in regards to Bitcoin prices.

The “bitcoin nupl chart 2021 glassnode” is a data-based article that suggests traders view $46,000 as Bitcoin’s final line in the sand.

Data suggests traders view $46,000 as Bitcoin’s final line in the sand

The price of Bitcoin (BTC) fell below $47,000 on Dec. 13, and altcoin values fell by as much as 25% in a matter of minutes, making it a “bloody Monday.” 

When the move happened, observers immediately assumed that Bitcoin’s 8.5 percent drop was linked to the Federal Open Market Committee (FOMC) meeting, which begins on December 15.

Investors are concerned that the Federal Reserve will eventually begin tapering, or reducing the Federal Reserve’s bond repurchasing program. The rationale is that a change in monetary policy would have a detrimental effect on riskier assets. Bitcoin experienced a 67 percent year-to-date increase till Dec. 12, despite the fact that there’s no way to prove such a theory. As a result, it makes sense for investors to take gains ahead of market uncertainty, which might be linked to the present BTC price fall.

Data suggests traders view $46,000 as Bitcoin’s final line in the sandOn December 13, the top cryptos had a good week. Nomics is the source of this information.

The price of bitcoin has retraced 8.2% in the last week, but it has outperformed the overall altcoin market. In comparison, the top cryptocurrency’s market share (dominance) has declined from 47.5 percent to 42 percent in the previous 50 days. Investors may have just flocked to Bitcoin since it has a lower risk than altcoins.

Tether’s discount reached a low of 4%.

The difference between China-based peer-to-peer (P2P) trading and the official US dollar currency is measured by the OKEx Tether (USDT) premium or discount. Excessive demand for cryptocurrency investment is indicated by figures exceeding 100%. A 5% discount, on the other hand, generally implies that there has been a lot of selling activity.

Data suggests traders view $46,000 as Bitcoin’s final line in the sandUSDT peer-to-peer premium on OKEx vs. USD. OKEx is the source of this information.

On Dec. 13, the Tether indicator reached a low of 96 percent, which is mildly negative but not worrisome given the 10% reduction in overall cryptocurrency market value. However, it has been more than two months since this statistic has topped 100%, indicating a lack of enthusiasm among Chinese traders.

The cumulative liquidations throughout the 24 hours, proving that the December 13 price drop had only a minor influence on investor mood, totaled $400 million.

Data suggests traders view $46,000 as Bitcoin’s final line in the sandOn December 13, there were total derivatives exchange liquidations. Coinglass.com is the source of this information.

More critically, owing to inadequate margin, just $300 million of lengthy leverage contracts were forced to be cancelled. When compared to the December 3 collapse, when $2.1 billion in leveraged buyer positions were closed, this amount seems small.

At the time, there is no extreme demand from Bitcoin bearish.

Traders could examine perpetual futures to further illustrate that the crypto market structure was unaffected by the dramatic price decline. To offset the exchange’s risk, these contracts feature an embedded rate and often levy a fee every eight hours.

Longs (buyers) are requesting higher leverage when the financing rate is positive. Shorts (sellers) requiring extra leverage, on the other hand, cause the financing rate to become negative.

Data suggests traders view $46,000 as Bitcoin’s final line in the sand8-hour financing rate for Bitcoin perpetual futures. Coinglass is the source of this information.

Despite the fact that most cryptocurrencies incurred significant losses on December 13, the overall market structure remained stable. The perpetual futures 8-hour financing would have gone below 0.05 percent if there had been strong demand for shorts betting on a Bitcoin price decrease below $46,000.

Tether selling at a 4% discount in China, $300 million in long contract liquidations, and a neutral financing rate are not signs of a bear market. There is no reason to advocate for $42,000 or lower Bitcoin prices until these fundamentals alter drastically.

The author’s thoughts and opinions are purely his or her own and do not necessarily represent those of Cointelegraph. Every investing and trading decision has some level of risk. When making a choice, you should do your own research.

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Kyle Samani, the co-founder of hedge fund Multicoin Capital, believes that $46,000 is Bitcoin’s final line in the sand. Reference: kyle samani net worth.

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Emilia James
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