Bitcoin needs to record 77% growth in the next four weeks to reach the broadly projected value at the end of the year of 100,000 dollars. Although analysts are optimistic about the cryptocurrency, they do not predict growth in six figures in the short term.
“The latest Merchant Commitment report shows net long-term positioning on the Chicago Mercantile Exchange, with increased commitment from asset managers,” said Laurent Kssis, a specialist in cryptocurrency (ETF) and director of CEC Capital. The report was released on Friday. “When I say that, it won’t be enough to dedicate $ 100,000 this month to what everyone predicted.”
Kssis said the cryptocurrency is still sensitive to price withdrawals encouraged by leaching the lever. As long as the long-term trend remains positive, short-term pressures and liquidations, due to the offered greater leverage, remain high and will continue to put pressure on the price of BTC, Kssis added.
While the open interest rate on bitcoin futures (OI) in US dollars recently fell along with the price of cryptocurrency, the metric remains high when measured in BTC terms, indicating a leverage surplus in the market. Open interest refers to the number of contracts that are traded but not liquidated by offsetting positions.
“The Olympics denominated in bitcoins have now remained above 365,000 BTC for more than a month,” Arcane Research reported on Tuesday. “It is not uncommon to see such a high Olympics held for so long. This could suggest that the market is currently oversaturated with financial leverage. “
Another signal: Open interest in the Chicago Mercantile Exchange, a substitute for institutional activity, declined along with an increase in activity on the retail-focused Bybit exchange. In the past, increased activity on Bybit has paved the way for price withdrawals.
“Bybit’s share of the global open interest in bitcoin futures remained high throughout November. In the past, Bybit’s Olympics have experienced huge ups and downs as stores have become crowded, ”notes Arcane Research.
While the continuing decline in liquidity supply in the market leaves the door open for a large set of large purchase orders, renewed institutional participation on the eve of the new year seems unlikely.
“As the end of the year approaches quickly, most investors are likely to release their risk positions and allow them to show decent annual results,” Kssis said. “We don’t see a bull race in 2021.”
Over 75% of the offer can be considered illiquid at the time of printing, according to Glassnode. An illiquid offer is defined as the number of coins held at addresses that consume less than 25% of their incoming coins.
Matthew Dibb, chief operating officer and co-founder of Stack Funds, said the chances of bitcoin rising to $ 100,000 are dwindling as the macroeconomic environment doesn’t seem to support prices, especially with Federal Reserve Chairman Jerome Powell the recent hawk turn. The central bank could discuss accelerating a reduction in bond purchases or reducing asset purchases at its December meeting, Powell said earlier this week.
“Although we are in the short term, there is a growing suspicion that $ 100,000 will be affected,” Dibb said. “Repeated interest, however, is being shown in ether and other coins associated with them layer 1 blockchains. “
While bitcoin fell 1.4% this week, ether rose about 5%. The ether-bitcoin ratio (ETH / BTC) has emerged from its multi-month consolidation, signaling etheric leadership forward or the rotation of money from bitcoin to ether and other alternative cryptocurrencies in the coming weeks.
“Currently, ETH seems poised to make new highs against BTC – something we haven’t seen since the ICO (initial coin offering) mania of 2017,” said David Hoffman, founder of the Bankless Newsletter. noticed. “One topic we’ve seen throughout Ethereum’s history is that the ETH / BTC chart is growing in the bull markets and falling during the bear market.”
Hoffman added that a potential break of the ratio above 0.80 would lead to another “wild period in crypto markets”. ETH / BTC is trading near the 0.80 mark on the Binance Exchange.
“Bull jumps to $ 100,000 seem unlikely because there could be a big rise in altcoin later this month,” said MintingM, a Mumbai-based crypto asset management company.
However, MintingM said that bitcoin could surprise everyone if a large company or state accepts it as a means of payment or if the US Stock Exchange and the Commission (SEC) approve a spot based on a bitcoin fund traded on the stock exchange.
According to historical data, bitcoin could rise to about $ 73,000 – about 29% above the current price of $ 56,400, if the macro situation improves and the ether raises a strong offer, raising the entire market to more.
“The average return from Thanksgiving by the end of the year was 29%, with strong growth of 72% in 2020,” said Jeff Dorman, Arca’s chief investment officer. it was said in a blog post published on Monday.