BIG PRICE FALL ON CRYPTO MARKET!!
Let’s find out the reason behind it…

Rainbow Bitcoin Weekly 21.12.06

Last Saturday, the cryptocurrency market experienced another plunge from

the lowest near $57,000 to $42,000. The intensity of the callback is strong,

and the reasons behind the plunge may be multiple factors such as the

expectation of interest rate hikes (a massive increase on the short-term

interest rate), pessimistic expectations of stagflation, etc.

In addition, the continuous spread of new variants of the new coronavirus in

South Africa is certainly another one of the risk factors. As a result, risk assets

are currently undergoing a substantial callback. It is recommended to

carefully control the risks. After Bitcoin’s massive falling on price, there is a

wave of less powerful rebounds. However, the overall downward trend here

has not ended regardless of the call-back strength. Adding or holding more

positions is still risky.

Bitcoin is still in a turbulent trend at present, and the small-level tokens shall

select the turbulence direction in the last two days. At present, the short-term

rise is not likely happening. Therefore, it is recommended to carefully control

the investing positions and try to avoid investing in full positions.

What’s happening last week:

SBI, a financial magnet, is planning to release the first crypto asset funding in Japan.

Krafton, a Korean game developing company, has invested 5 billion Korean dollars (approximately $4,234,420.50)in NaverZ as they are moving forward to Metaverse development.

Google trends: The word “Web3.0”’s search volume has grown substantially in the USA.

The Indian Government is expecting to add cryptocurrencies into the tax law.

European Central Bank governor: “Bitcoin is a highly speculative asset.

The recap of the additional data analysis for last week is down below.

Number of on-chain Bitcoin Transactions

The number of on-chain Bitcoin transactions has slightly grown compared too

the week before. Last week’s number of transactions has reached 313

thousand which is the highest among the recent three months. The lowest

number of transactions last week has reached 223 thousand. The overall

trend is still rapidly growing upwards. The number of transactions has been

slowly increasing since February 2018.

The number of on-chain Bitcoin transactions symbolizes the core value and is

also being an important supporting factor of Bitcoin market price. Currently,

the Number of On-chain Bitcoin transactions is showing rapid growth in the

short term.

Hash rate of Bitcoin

The average hash rate of Bitcoin has significantly grown approximately 37

Ehash/s comparing the lowest before. The highest has reached 182.13

Ehash/s while the lowest has reached 145.5 Ehash/s.

The value of the Bitcoin hash rate among the whole network has been

doubled since the low point in June this year. Hash rate is considered as the

basis of Bitcoin since it directly affects the market price of Bitcoin. It is fair to

say that the hash rate is the core stone of Bitcoin’s long-term value.

Bitcoin Supply on Exchange Wallet

Last week’s reserved amount of Bitcoin upon each mainstream exchange has

been increased to a total of 1.307082 million BTC which is nearly 15,000 BTC

more compared to the week before. It appears to be a relatively high level of

increase recently and it has given decent pressure of selling off. The BTC

supply of exchange wallets has nearly maintained at the level of 6.2% which

has rarely shown any changes.

The supply of Bitcoin among exchange wallets is a vital index to monitor the

trajectory of Bitcoin’s market price. The net inflow foreshadows the large

pressure of selling off their Bitcoin while the net outflow indicates that the

investors are more likely to hold their Bitcoin.

The open interest of the grayscale trust

Diagram 1: Grayscale Trust Open Interest
Diagram 2: BTC-Grayscale Trust OTC Premium Rate

The Grayscale BTC trust has continually underweighted 249 Bitcoins which

results in underweighting 990 Bitcoins in the past 7 days. The underweight

rate remains steady. The Grayscale BTC trust has remained outflowing since

March 3rd.On December 4, the Grayscale BTC trust open interest is 645,801

and the GBTC premium index is -18.80%.

USDT Premium Rate

The USDT premium rate on December 4 is 1.00130766. Comparing the week

before, this is a significant increase within the decent level. This is a fair call-

back considering the dropping shown in the diagram and last week’s market

condition.

The USDT premium index is the ratio of USDT/USD, and it reflects the

volume of fund which enters the market.

Fear & Greed Index

Last week’s fear & greed index is highly affected by the market condition

which massively dropped to 16 as the lowest. It is the lowest in the recent two

months.

Such a low index indicates that the investors are extremely upset about the

market. It is recommended to add positions rationally but please manage the

investments carefully and stay focused on risk control.

Fear & Greed Index, also known as VIX (Volatility Index). It is originally a

stock market index containing many factors such as market volatility, market

trading volume, social media heat, and Google buzzwords analysis. The

threshold of this index is 0 to 100. The lower index indicates the investors are

more likely to sell while the higher index indicates the investors are more

likely to hold. Fear & Greed index can be used to predict the potential risk for

helping to make investment decisions. An extremely low fear & greed index

could bring potential opportunities for buying while an extremely high fear &

greed index could bring massive change to the market.

Google Search Trend

The global search volume of the word “Bitcoin” has remained nearly the same

level as the week before. The search volume is 76 which is a medium-high

level.

Disclaimer:

This article is NOT in any form an investment recommendation, please research

carefully before you make any investment decisions. The price of bitcoin is

$49,000 while this article is being written.

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