Difference between web 1.0, 2.0, 3.0 and Exchange flow gap hits 10K BTC — 5 things to know in Bitcoin this week.
Exchange flow gap hits 10K BTC — 5 things to know in Bitcoin this week

Bitcoin (BTC) kicks off the second week of November still standing strong near 18-month highs — what will the next BTC price movements be?

The leading cryptocurrency has withstood sell pressure to bring about another noteworthy weekly close.

As what analysis is increasingly portraying as a shift in attitude, Bitcoin and altcoins alike are declining to retrace gains that began over a month ago.

Amid a challenging macroeconomic climate, crypto is going its own way, while assets such as stocks are feeling the effects, and bulls are hopeful that the upside remains in sight.

A lot of potential volatility triggers are in store for the upcoming week. With inflation still on everyone’s mind, the United States Federal Reserve will deliver a series of remarks as part of planned engagements, with Chair Jerome Powell among the speakers.

A short trading week on Wall Street will mean an extended period of “out-of-hours” trading next week, allowing crypto to possibly see more volatile moves into the next weekly close.

Behind the scenes, Bitcoin is technically as robust as BTC price action implies — hash rate and difficulty, already at all-time highs, are expected to add to their record tally in the coming days.

Cointelegraph explores these issues and more in its weekly overview of what to expect when it comes to Bitcoin market activity in the short term and beyond, including the differences between web 1.0, 2.0, 3.0, and 4.0, the history of web 1.0, 2.0, 3.0, the difference between web3 and web 3.0, the difference between web 3.0 and 2.0, the difference between web 1.0, 2.0, 3.0, and the difference between metaverse and web 3.0.

Bitcoin bulls refuse to give an inch

The Nov. 6 weekly candle close for Bitcoin was, like last week, remarkable. The close was just over $35,000, setting a new 18-month high, and then the market experienced a bout of volatility that saw a brief dip below the $36,000 mark, according to Cointelegraph Markets Pro and TradingView.

Buyers and sellers are in a fierce competition, and as a result, resistance levels are proving hard to overcome, with liquidations occurring at the close. Skew noted on the hourly chart that “both sides of the book were swept” on exchanges. On Nov. 5, Skew also reported increased open interest (OI) on the largest global exchange, Binance.

Daan Crypto Trades pointed to funding rate data that showed longs paying shorts. He commented that “there’s still quite a lot of positions that opened during the weekend,” and that he expected “some further volatility after the futures open and on Monday to take those out (on both sides).”

Cointelegraph reported that some market participants are betting on a $40,000 Bitcoin price target. The timeline for this is debatable, but there are predictions for the end of 2023 that suggest even higher levels. Crypto Tony, however, is taking a more conservative approach. He informed X subscribers that he will only be short if the $34,100 support zone is lost, and will close his current long position if $33,000 is lost.

Fed speakers lead macro week

This week, instead of focusing on the U.S. macroeconomic data prints, the market is looking towards the Fed as a potential source of volatility.

In the lead up to Veterans Day holiday on Nov. 10, several Fed officials, including Chair Powell, will be giving speeches.

The timing of these speeches is important, as the Fed decided to keep interest rates unchanged last week even though the inflation data was better than expected.

Data from CME Group’s FedWatch Tool shows that the market is expecting the Fed to keep rates unchanged in the upcoming meeting.

“All attention remains on the Fed,” The Kobeissi Letter commented in their macro diary.

Kobeissi added that the bond markets could be volatile in the coming days and stocks have already seen some changes last week, with the S&P 500 abruptly changing direction after the second half of October.

Furthermore, Game of Trades suggested that “major economic volatility” is likely due to the rare contraction in U.S. consumer credit, which has only happened three times in the last 75 years, coinciding with the 2008 global financial crisis and the March 2020 COVID-19 crash.

Hash rate, difficulty propelled to new all-time highs

The gains of Bitcoin network fundamentals this year seem unstoppable as hash rate and mining difficulty soar to unprecedented heights. The upcoming adjustment will only further strengthen these levels.

BTC.com’s data indicates that the difficulty is set to increase by 2.4% on Nov. 12, reaching a remarkable 64 trillion. The hash rate, although more difficult to measure accurately, has also been on a clear upward trajectory in recent months.

James Van Straten, research and data analyst at CryptoSlate, highlighted the significance of last week’s hash rate. As Cointelegraph reported, one theory suggests that miners are likely to increase their BTC holdings ahead of the upcoming block subsidy halving, when the BTC reward per block will be cut by 50%.

Filbfilb, co-founder of trading suite DecenTrader, predicted that BTC/USD could reach $46,000 by the time of the halving.

Exchange flow gap reaches second-highest levels

As crypto markets revive, the profitability of Bitcoin holders is changing. Cointelegraph reported that when the spot price of BTC exceeded $30,000, it exceeded the cost of acquisition for many recent investors.

Now, signs of transformation are visible on exchanges, with inflows slowing down and withdrawals approaching the highest levels of the year. Van Straten noted that this marks “a significant shift in Bitcoin exchange flow.”

“Over 61,000 BTC was recently withdrawn, a substantial increase from the year-to-date low of nearly 43,000 BTC,” he wrote in a CryptoSlate analysis on Nov. 3. The gap between exchange deposits and withdrawals in BTC terms reached its second-highest level ever — an impressive 10,000 BTC, according to data from the on-chain analytics firm Glassnode.

This difference is only surpassed by the peak of more than 80,000 BTC withdrawn after the collapse of FTX. Glassnode also shows that aggregate capital inflows have reached their highest level this year, which Ali describes as “strong investor confidence.”

Crypto “fear” hits post-$69,000 highs

Improving sentiment often carries a twofold effect in the crypto space, as the average hodler’s mindset turns more and more towards profit.

This is illustrated by the Crypto Fear & Greed Index, a classic market sentiment indicator that signals an alert when the market gets too exuberant.

Fear & Greed hit 84/100 during Bitcoin’s journey to its current all-time highs in November 2021 and, as of Nov. 6, is only 10 points away from that peak.

At 74/100, the market is already more “greedy” than at any point in the past two years. Nevertheless, for Crypto Tony, there is still room for further upside before the sentiment imbalance becomes too hard to ignore.

“I want to see EXTREME GREED before I consider closing some positions,” he told X subscribers about the index’s readings on Nov. 5, suggesting that Ether (ETH) should go higher first.

Fear & Greed’s historical extremes have been around 95/100, the last time being in February 2021.

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