Things to watch in Bitcoin this week

Despite a hopeful weekend, BTC/USD received warnings of phoney “out of hours” price movements, which proved to be accurate as the weekly closure pushed the pair down over $1,000.

Even so close to $37,900 was insufficient to meet analysts’ demands, and Bitcoin’s all-too-familiar rangebound behaviour from January continues.

For many, the issue is what will cause the status quo to shift.In the face of a lack of meaningful spot market recovery despite excellent on-chain data, an external trigger could be the catalyst for a shake-up. For example, the United States’ executive order on cryptocurrency regulation is expected in February, albeit the specific date is unknown.

Analysts are also watching the Federal Reserve, as any clues on inflation, interest rate hikes, or asset buy tapering might have a big influence on traditional markets, which Bitcoin and altcoins are still heavily associated with.

When determining Bitcoin’s next steps, we’ve identified three factors to examine.

Bears “hammer” down on BTC weekly close 

Even the modest increases into the weekly close were only a temporary source of joy for Bitcoin bulls on Sunday.

At 12 a.m. UTC, a rejection candle appeared, and BTC/USD dropped to $36,650.

Strong volume accompanied the rise, as highlighted by trader, analyst, and podcast presenter Scott Melker, emphasising the unreliability of weekend price action when it comes to constructing a position.

Melker confirmed what several other experts suggested last week: $39,600 must be regained before a more bullish perspective can prevail.

Rekt Capital, a fellow trader and analyst, was equally unimpressed by the weekly candle, writing on Twitter that BTC “continues to battle with $38,500 resistance.”

“To ensure upside beyond $39,000, BTC needs to Weekly candle Close above this range,” he continued.

With a lacklustre performance behind it, Bitcoin has returned to its usual trading range, which some fear could lead to a retest of lower levels.

“I’m looking forward to any opportunities to compound if we trade in 29-40k range for a long time,” said popular trader Pentoshi.

Meanwhile, the rally to $38,600 highs succeeded in boosting previously negative funding rates on derivatives, as expectations quickly shifted from additional downside to a positive continuation.

However, the reversal pushed funding rates back into negative territory, with most staying slightly below neutral as of this writing.

Old hands age well

The more comfortable trend of seasoned Bitcoin hodlers holding to their assets continues to play out behind the scenes.

The amount of currencies that last moved between five and seven years ago has reached an all-time high, according to data released this week by on-chain analytics startup Glassnode.

That group of currencies has grown to 716,727 BTC.

Despite price declines, Bitcoin exchange reserves actually decreased in January. According to Glassnode, big exchanges have lost $243 million this week alone.

GBTC dives to record 30% discount

For the Grayscale Bitcoin Trust, things aren’t going so well (GBTC).

Despite data indicating a resurgence of institutional interest in Bitcoin in January, demand for the industry’s flagship BTC investment product remains low.

Last week, GBTC traded at its greatest ever discount to the Bitcoin spot price, according to data from on-chain analytics firm .

Investors used to pay a premium for exposure to this discount to net asset value (NAV) — the fund’s BTC holdings — but the tables have long turned.

On Jan. 22, new entrants were technically allowed to purchase GBTC shares for roughly 30% less than the day’s spot price.

According to data, GBTC has been in a fast shifting environment in recent months as a result of market movement and the introduction of exchange-traded funds (ETFs). GBTC is set to become a spot-based ETF, but only with the consent of US regulators.

On-chain analyst Jan Wuestenfeld assessed the scenario, saying that despite the discount, GBTC did not necessarily represent a long-term way for institutional investors to profit from “cheap money.”

“Yes, if you believe it will be transformed into a spot ETF at some point,” he commented on Twitter over the weekend, “but there are also the costs to consider and the fact that you don’t truly have the keys.”

Bitcoin (BTC) is off to a strong start this week, but it’s not in the bulls’ favour.

Despite a hopeful weekend, BTC/USD received warnings of phoney “out of hours” price movements, which proved to be accurate as the weekly closure pushed the pair down over $1,000.Even so close to $37,900 was insufficient to meet analysts’ demands, and Bitcoin’s all-too-familiar rangebound behaviour from January continues.

For many, the issue is what will cause the status quo to shift. In the face of a lack of meaningful spot market recovery despite excellent on-chain data, an external trigger could be the catalyst for a shake-up. For example, the United States executive order on cryptocurrency regulation is expected in February, albeit the specific date is unknown.

Analysts are also watching the Federal Reserve, as any clues on inflation, interest rate hikes, or asset buy tapering might have a big influence on traditional markets, which Bitcoin and altcoins are still heavily associated with.

When determining Bitcoin’s next steps, we’ve identified three factors to examine.

Bears “hammer” down on BTC weekly close 

Even the modest increases into the weekly close were only a temporary source of joy for Bitcoin bulls on Sunday.

At 12 a.m. UTC, a rejection candle appeared, and BTC/USD dropped to $36,650.

Strong volume accompanied the rise, as highlighted by the trader, analyst, and podcast presenter Scott Melker, emphasising the unreliability of weekend price action when it comes to constructing a position.

Melker confirmed what several other experts suggested last week: $39,600 must be regained before a more bullish perspective can prevail.

Rekt Capital, a fellow trader and analyst, was equally unimpressed by the weekly candle, writing on Twitter that BTC “continues to battle with $38,500 resistance.”

“To ensure upside beyond $39,000, BTC needs to Weekly candle Close above this range,” he continued.

With a lacklustre performance behind it, Bitcoin has returned to its usual trading range, which some fear could lead to a retest of lower levels.

“I’m looking forward to any opportunities to compound if we trade in 29-40k range for a long time,” said popular trader Pentoshi.

Meanwhile, the rally to $38,600 highs succeeded in boosting previously negative funding rates on derivatives, as expectations quickly shifted from additional downside to a positive continuation.

However, the reversal pushed funding rates back into negative territory, with most staying slightly below neutral as of this writing.

GBTC dives to record 30% discount

For the Grayscale Bitcoin Trust, things aren’t going so well (GBTC).

Despite data indicating a resurgence of institutional interest in Bitcoin in January, demand for the industry’s flagship BTC investment product remains low.

Last week, GBTC traded at its greatest ever discount to the Bitcoin spot price, according to data from an on-chain analytics firm.

Investors used to pay a premium for exposure to this discount to net asset value (NAV) — the fund’s BTC holdings — but the tables have long turned.

On Jan. 22, new entrants were technically allowed to purchase GBTC shares for roughly 30% less than the day’s spot price.

According to data, GBTC has been in a fast-shifting environment in recent months as a result of market movement and the introduction of exchange-traded funds (ETFs). GBTC is set to become a spot-based ETF, but only with the consent of US regulators.

On-chain analyst Jan Wuestenfeld assessed the scenario, saying that despite the discount, GBTC did not necessarily represent a long-term way for institutional investors to profit from “cheap money.”

“Yes, if you believe it will be transformed into a spot ETF at some point,” he commented on Twitter over the weekend, “but there are also the costs to consider and the fact that you don’t truly have the keys.”