New BTC miner surrender? 5 things to know in bitcoin this week

Bitcoin (BTC) is preparing to exit a dismal November just over $16,000 – what could be on the list for BTC price this week?

At a time what analyst Willie Woo called “unprecedented deleveraging,” bitcoin is far from out of the woods after losing more than 20% this month.

The impact of the FTX explosion is still unknown, and warning signs are still pouring in even after the first wave of crypto business bankruptcies.

Particularly this week, all eyes are on miners, who are seeing profits shrink due to lower spot prices and higher hash rates.

Turbulence is in the air, and should there be another “surrender” among miners, the entire ecosystem could experience another shock.

As the “maximum pain” looms for the average worker, Cointelegraph takes a look at some of the key factors affecting BTC/USD in the short term.

Bitcoin miners due to ‘surrender’ – Analyst

Like others, bitcoin miners are seeing a lot of pressure when it comes to selling their accumulated BTC at a profit.

It remains to be seen exactly how much financial pain the average miner is in, but a classic metric is getting ready to call “surrender” once again.

Just months after the last such period, Hash Ribbons warned that conditions are once again becoming unsustainable.

Hash Ribbons uses two moving averages of the hash rate to derive inferences about a miner’s participation in the Bitcoin network. Crossovers of trend lines indicate maturity and recovery phases.

For Kripto Mevismi, a contributor to the on-chain analytics platform CryptoQuant, the time for the first is near.

“So the difficulty of bitcoins right now is very high for miners, which means; the costs are getting higher and it’s getting harder to do business in this kind of environment,” he wrote in a blog post:

This is why miners are not working at full strength. If they have efficient new generation mining machines they run them but that’s it. Inflation is high and people are feeling the impact of the cost of living, the price of bitcoin has fallen, and the cost and difficulty of mining are increasing. Tough environment for miners.”

Bitcoin Hash Ribbons Chart. Source: LookIntoBitcoin

Kripto Mevismi added that a significant change in the mining difficulty could help the situation.

BTC.com estimates for the next revision on December 6th, a 6.4% drop in difficulty at the time of writing. And if it bears fruit, it would be the largest such drop since July 2021.

BTC.com and others similarly estimate that the hash rate is now declining from record levels as mining winds down.

Bitcoin network basics overview (screenshot). Source: BTC.com

BTC/USD heads for volatility in the monthly close

The BTC/USD pair managed to avoid significant weekly losses at the closing of the last candle on November 27.

At around $16,400, the weekly close was higher than the previous week, with the pair still at two-year lows, data from Cointelegraph Markets Pro and TradingView shows.

BTC/USD 1-week candlestick chart (Bitstamp). Source: TradingView

With little volatility characterizing intraday price action, traders and analysts remain cautious about the next move.

“It’s a long weekend, so expect things to get interesting as we move towards the weekly and monthly closes,” on-chain analytics resource Materials Indices Wrote In part from last week’s tweet.

post post repeat The closing of November 30 is likely to bring new instability, with BTC/USD currently down 21.25% against the start of the month.

This makes November 2022 the worst November since the previous bear market year in 2018, data from Coinglass confirms.

BTC/USD monthly returns chart (screenshot). Source: Coinglass

In the shorter timeframes, famous Crypto trader Tony, meanwhile, highlighted $16,000 as a key area of ​​the flip to reach higher entry levels next, considering the long-term trend.

Annotated BTC/USD chart. Source: Crypto Tony / Twitter

“Lower highs along with consolidation without a major resistance area. If you want to enter safely, wait for a reversal on the lows,” he said Summarization in the weekend.

Annotated BTC/USD chart. Source: Crypto Tony / Twitter

As Cointelegraph has reported extensively, the next bear market bottom for Bitcoin is a moot point at the moment, and some targets are more popular than others.

One vociferous commentator, Il Capo of Crypto, reiterated his view that $12,000 could be next for BTC/USD.

Highlight The relationship between permanent futures trading volume and the spot price, he cautioned that the current market structure does not support further gains.

It will probably be 12,000-14,000. 40-50% decrease in altcoins,” he stressed.

Beneath the bitcoin sea, scammers are piling up

The population of the Bitcoin ecosystem, be it large or small, is “aggressively” adding to its exposure to BTC this month.

In a positive sign for future supply pressures – where demand comes in for a larger portion of illiquid supply – the backlog appears to be building rapidly.

According to on-chain analytics firm Glassnode, retail investors are mostly to blame for the current trend.

Smaller investors, variously referred to as “crabs” and “shrimps” are growing in number depending on portfolio balance.

Bitcoin Shrimps (featured in a Twitter thread about the phenomenon.

Bitcoin shrimp net position change chart. Source: Glassnode / Twitter

Another post noticed:

“Crab (up to $10 BTC) also saw a significant balance increase of $191.6K BTC over the last 30 days. This is an all-time convincing high, surpassing the July 2022 peak of 126K BTC per month.”

Bitcoin “crab” net position change chart. Source: Glassnode / Twitter

As Cointelegraph reported, part of the increase in smaller wallet numbers could be due to exchange users withdrawing funds into private storage.

Woo signs contained “maximum pain”

For Willy Woo, analyst in charge of popular stats resource Woobull, on-chain metrics indicate that the next Bitcoin macro bottom is imminent.

By highlighting three of them this weekend, Woo showed that for all intents and purposes Bitcoin is behaving exactly as it did in the previous bear market pit.

For example, a portion of the held supply of Bitcoin approaches an unrealized loss, a phenomenon covered by the “maximum pain” model.

“Bitcoin Bottom Approaching Max Pain Pattern. Historically, BTC price reaches cycle lows when 58%-61% of coins are underwater (orange). Green shading is set for closed coins within GBTC Trust,” Woo explained next to the chart.

Bitcoin Max Pain infographic. Source: Willy Woo / Twitter

Continuing, he notes that the value of the MVRV ratio for BTC/USD is also targeting the “buy” zone, which has historically given investors the maximum possible profit.

MVRV is the market value of Bitcoin divided by the maximum realized – the total price at which the last Bitcoin moved. The resulting figure has delivered the buy and sell zones corresponding to the price extremes.

Wu’s comment “MVRV ratio is deep within the value area” advertiser:

“Under this signal, we were already low (1) until the recent white swan debacle for FTX brought us back into the buy (2) zone.”

Annotated Bitcoin MVRV chart. Source: Willy Woo / Twitter

A third chart for Wu, Cumulative Value Destructive Days (CVDD), was covered by Cointelegraph recently.

“Use these charts at your own discretion, we are going through an unprecedented time of deleveraging,” he added, warning that “past cycles do not necessarily reflect future cycles.”

The overall mood was rocked by China’s protests

Some major economic data is due out from the US this week, but cryptocurrency analysts are focusing more on China.

With an already fragile status quo hanging on to inflationary trends, disruptions at global factories could destabilize market performance, some warn.

China is in the grip of a wave of protests against government policy on COVID-19, with many cities defying lockdowns to demand an end to “COVID-Zero”.

With this in mind, risky assets could be in for a rough ride if the situation gets out of hand.

“Bitcoin’s critical area can’t be broken, so we’re still consolidating within that range. About support right now,” Michael Van de Poppe, founder and CEO of trading firm Eight, said. explained:

“If this gets lost, I would expect new lows to emerge in the markets, possibly dependent on China and FTX contagion this week.”

Even the mainstream media was warning about the potential fallout that day, with John Toro, head of trading at Exchange Independent Reserve telling Bloomberg that “high contagion risks are being identified in the cryptocurrency pool.”

Asian stock markets were slightly lower on the day, with Hong Kong’s Hang Seng and Shanghai Composite Index down 1.6% and 0.75% respectively at the time of writing.

One-day candlestick chart of the Hang Seng Index. Source: TradingView

Bonus: Bitcoin bottoms in Crude Oil

In a related macro note, a well-known analyst said that Bitcoin is now in the line of “outperforming” in terms of the US dollar.

Related: Bitcoin May Need $1 Billion More On-chain Losses Before New BTC Price Bottom

In terms of WTI, Bitcoin price action is already at its lowest level – and history calls for a recovery, which includes a significant bullish trend against the US dollar.

“We’ve finally reached the bottom of the channel,” TechDev said has been confirmed during the Weekend:

“Bitcoin Crude Purchasing (energy) peaked in April 2021. It now looks set for another phase of outperformance (and USD appreciation).”

Annotated BTC/WTI chart. Source: TechDev / Twitter

The accompanying chart drew specific parallels to Bitcoin’s performance in the pit of the last bear market in late 2018.

As Cointelegraph reported, meanwhile, TechDev isn’t the only bullish voice characterizing BTC’s price action in the new year.

The views, ideas and opinions expressed herein are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.