BTC Price keeps falling and the liquidation is coming to an end

Rainbow Bitcoin Weekly 21.12.21

Throughout December, prices in the crypto world have been relatively sluggish. Last week, the entire Chinese crypto industry is on the verge of delisting, which undoubtedly increases people’s panic, and the market is also affected a lot. Last week, the Chinese head exchange liquidation is coming close to the end. The global economy is sluggish and inflationary due to the continued outbreak of the epidemic. The global commodity market, including the crypto market, is in a downturn. The K-line of Bitcoin continues to be in a declining channel, and the high point ahead continues to move downward, allowing the downward channel to continue to expand. At the four-hour level, the price is also at the standard downward trend suppression line. Under normal market conditions, the $48,500 trend suppression above is worth attention. However, the indicators in the attached drawings reflect the shrinkage of short positions. In summary, it is difficult to open an upward channel in the absence of extreme market conditions. The recent market continues to be dominated by shocks. The above content does not constitute investment advice and is for reference only.

What’s happening last week — —

l Huobi Global has finished liquidation in China. The function of crypto-asset disposal will be detained until December 31st.

l Melania Trump, the Former First Lady of the United States, has launched her own NFT products. Partial earnings will be donated to the charity.

l The Bank of France successfully completed the first phase of the central bank’s digital currency pilot program, and the second phase will be mainly used for cross-border transactions.

l The Fed expects to raise interest rates three times next year, reducing the size of debt purchases each month, and increasing it to 30 billion U.S dollars.

l Fed Chairman Powell: At present, we have not seen the financial stability risks brought by cryptocurrency.

l The number of Metaverse trademark application companies has reached thousands, a tenfold increase in three months.

l Reuters: Boeing plans to build a “virtual twin” aircraft in the Metaverse.

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 shown a significant decline compared to the week before. Last week’s highest has reached 280 thousand which is nearly 10 thousand decreases compared to the week before. The lowest has reached 206 thousand. The overall trend is switching from fluctuating upwards to partially fluctuating downwards. The number of transactions has been slowly increasing since February 2018.

The number of on-chain Bitcoin transactions symbolizes the core value of Bitcoin and is also 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 computing power of the entire Bitcoin network began to decline rapidly this week, and then rose again, forming a V-shaped rebound. The highest has decreased to 172 Ehash/s compared to the week before while the lowest has reached 157 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 decreased by 4280 thousand resulting in a total of 1,279,547 Bitcoins. The selling pressure has decreased compared to the week before. The total BTC supply of mainstream exchange wallets has maintained at the level of 6.1% last week.

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 in the grayscale trust

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

The grayscale BTC trust has underweighted 249 Bitcoins in the last 7 days which is underweighted of 1066 Bitcoins in the last 30 days. The rate of underweighting remains steady. The Grayscale BTC trust has remained outflowing since March 3rd. On December 11, the Grayscale BTC trust open interest is 645,337 and the GBTC premium index is -19.92%.

USDT Premium Rate

UDST premium rate has shown a slight decrease resulting in 1.00029542 compared to the week before due to the continuously uprising panic in the market. However, the declining rate is decreasing. It signals that the decrease of premium rate is near the bottom.

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 not turning well. It still varies in a level of extreme panic. The average was maintained at the level of 25. The investors are still 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 Google search volume of the word “Bitcoin” has shown significant growth compared to last week. The highest last week has reached 81. Based on last week’s analysis, this increase signals the worry of the investors more likely.

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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 $46,200 while this article is being written.

2021.12.21

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