YEREVAN (CoinChapter.com) — Bitcoin (BTC) price shows signs of consolidation after nearly hitting $36,000 for the first time in about eighteen months. In doing so, the cryptocurrency may correct toward $32,000 in the week ending Nov. 12, 2023.
What Happened in Bitcoin Market Last Week?
Bitcoin struggled to continue its prevailing bullish momentum in the week ending Nov. 5. The cryptocurrency’s price rose by a modest 1.5% but remained unsure about pursuing a breakout above $36,000.
Key reasons include profit-taking by crypto miners. According to CryptoQuant, Bitcoin miners’ reserve has dropped by over 3,900 BTC (~$136 million) since Oct. 26. In other words, these whale entities have started securing profits in anticipation of a BTC price correction.
The Bitcoin gains last week further coincided with economic data and Federal Reserve commentary that suggested a decline in interest rates. Expectations of a rate hike pause until mid-2024 have served as a primary driver for the riskier markets, primarily as they reduce appetite for safer assets like bonds and the US dollar.
For instance, the yield on the benchmark 10-year US Treasury note dropped last week. In turn, the US dollar index (DXY), a barometer to measure the greenback’s strength against a pool of top foreign currencies, plunged 1.42% last week.
Bitcoin and the dollar share a long-term negative correlation with one another. A weaker dollar, thus, serves as a buying cue for crypto traders.
Meanwhile, key Bitcoin ETF news updates in the week ending Nov. 5 include:
- Speculations about the first spot Bitcoin ETF in the US remain strong, with a closed SEC meeting on Nov. 2 potentially being pivotal.
- Several firms, including Ark Invest, BlackRock, Bitwise, VanEck, and Valkyrie, had recently amended their ETF applications, possibly in response to SEC guidance, to meet a consistent standard before mass approval.
- There is a 90% chance that the Ark 21Shares spot Bitcoin ETF application will be approved by January 10, 2024, according to Bloomberg Intelligence analysts.
Key Events This Week
This week, the focus will be on the following economic events:
- Consumer Credit Change: On Nov. 7, the Federal Reserve will release a report on the change in the total amount of outstanding consumer credit, indicative of consumer spending and confidence.
- Michigan Consumer Sentiment Index: The preliminary report for November will be released on Nov. 10, offering insights into US consumer confidence levels.
- Consumer Inflation Expectations: Also on Nov. 10, preliminary data from the University of Michigan on 5-year consumer inflation expectations will be published, which the Federal Reserve uses in its inflation calculations.
These critical events can influence the Fed’s monetary policy decisions, especially considering the recent decision to maintain interest rates, pointing towards a peak in the tightening cycle. Bitcoin traders should focus on the outcomes to create long-term investment strategies.
Bitcoin to $32,000 Next?
From a technical standpoint, Bitcoin eyes a modest correction toward $32,000 this week. This level is near the lower trendline of a prevailing rising wedge channel, as shown below.
More cues for an imminent correction come from Bitcoin’s weekly relative strength index (RSI). The RSI is now above 71, an overbought region that typically prompts the price to drop, akin to what happened after April 2023.
