BTC price eyes $40K amid record hash rate — 5 things to know in Bitcoin this week

Bitcoin ( BTC ) starts a new week keeping traders guessing near its highest levels in 18 months — what’s next?

BTC price action has held higher after spiking above $38,000 last week, but since then, a testing “micro-range” has left bulls and bears locked in battle.

Whether a deeper retracement will come or a trip to $40,000 will leave naysayers behind is now the key short-term question for market participants.

Over the next few days, there are various potential catalysts to help effect trend emergence for Bitcoin, while underneath, there are mounting signs that the market is due a boost.

Volatility is set to come at the hands of the monthly close later on, but before then, a host of macroeconomic events has the ability to inject some surprise price action.

Cointelegraph looks at these issues and more in the weekly rundown of Bitcoin price volatility triggers for the week ahead.

Monthly close looms with BTC price up less than 10%

The monthly close forms the key diary date for day traders this week, with Bitcoin at a crossroads.

As Cointelegraph reported, untested liquidity levels to the downside and the lure of $40,000 to the upside — surrounded by resistance — make for a stubborn daily trading range.

Neither bulls nor bears have been able to dislodge an increasingly narrow corridor for BTC/USD, and even new higher highs on daily timeframes have been few and short-lived.

At the latest weekly close, a timely drop saw bids beginning to be filled, with Bitcoin dropping to lows of $37,100 before recovering, data from Cointelegraph Markets Pro and TradingView  shows.

BTC/USD 1-hour chart. Source: TradingView

For popular trader Skew, it is now time for bid momentum to return.

“Spot takers led the bounce eventually perp takers were the forced bid; mostly shorts forced out of the market,” he wrote in part of a dedicated analysis on X (formerly Twitter).

“Now as we go into EU session US session important to see if spot bids or not.”

Skew likewise referenced blocks of liquidity both above and below the spot price, with $37,000 and $38,000 as the key levels to watch.

“Lots of bid liquidity below $37K so if spot takers continue to be net sellers this would be the momentum required to fill those limit bids below,” he wrote about the order book on the largest global exchange, Binance.

“As for ask liquidity aka supply, that remains between $38K - $40K area ~ important area for higher.”

Bitcoin order book data for Binance. Source: Skew/X

With the monthly close just days away, Bitcoin is currently up 7.8% month-to-date, making November 2023 thoroughly average compared to years gone by.

Data from monitoring resource CoinGlass shows that November is normally characterized by much stronger BTC price moves, which can be both up and down.

Q4 overall, meanwhile, has so far delivered gains of nearly 40%.

Bitcoin monthly returns (screenshot). Source: CoinGlass

Key Fed inflation markers lead macro catalysts

A classic macro week with volatility triggers to match awaits Bitcoin traders as November draws to a close.

The United States Federal Reserve will receive some key data on inflation over the coming days, feeding into next month’s decision on interest rate policy.

Fed Chair Jerome Powell will speak on Dec. 1, following comments from senior Fed officials throughout the week.

The data releases of the most interest to markets will likely be the Q3 gross-domestic product and Personal Consumption Expenditures (PCE) print for October, coming Nov. 29 and Nov. 30, respectively.

Previously, U.S. macro data began to show inflation abating more quickly than markets expected, leading to positive reevaluations among risk assets.

“Full trading week ahead and volatility is here to stay,” financial commentary resource The Kobeissi Letter summarized on X.

Data from CME Group’s FedWatch Tool currently puts the odds of the Fed holding rates at current levels at an almost unanimous 99.5%.

Fed target rate probabilities chart. Source: CME Group

GBTC eyes BTC price parity

While Bitcoin is still waiting for U.S. regulators to greenlight the country’s first spot price exchange-traded fund (ETF), markets show that the mood continues to change for the better.

Nowhere is this more apparent than in the largest Bitcoin institutional investment vehicle, the Grayscale Bitcoin Trust (GBTC).

Itself due to be converted to a spot ETF, GBTC is fast approaching parity with its underlying asset pair, BTC/USD.

Once nearly 50% lower, the GBTC share price had a mere 8% discount to net asset value, or NAV, as of Nov. 24, per CoinGlass data.

GBTC premium vs. asset holdings vs. BTC/USD chart (screenshot). Source: CoinGlass

The fund’s renaissance has formed a key narrative over both a successful ETF approval to come and the emergence of genuine mass institutional interest in Bitcoin for the first time.

“Looks like the mkt is really expecting this ETF approval soon,” William Clemente, co-founder of crypto research firm Reflexivity, said,  referring  to the data at the weekend.

In terms of the watershed moment hitting, however, dates of note now all come after the new year.

In its latest market update sent to Telegram channel subscribers, trading firm QCP Capital argued that Jan. 3, 2024, would be a timely approval date, coinciding with the 15th anniversary of the Bitcoin genesis block.

Thereafter, Jan. 10 marks an interim deadline for the first spot ETF in line, that of ARK Invest, as “the final deadline for ARK’s application is included in the first approval batch.”

“And in the case ARK is rejected and the rest postponed yet again, the true make-or-break deadline is 15 March 2024 — where Blackrock and the main bunch of candidates face their own final deadline,” it added.

Bitcoin hash rate passes 500 exahash watershed

In advance of the upcoming block subsidy halving in April 2024, Bitcoin miners are deploying record processing power to the network.

Hash rate — the estimated measure of this deployment — is now at its highest levels ever, and this month passed 500 exahashes per second for the first time.

Bitcoin hash rate raw data (screenshot). Source: MiningPoolStats

The achievement not only represents a psychological landmark but also underscores miners’ conviction to future profitability — even when BTC price performance still remains 50% below its own peak.

At the same time, outflows from known miner wallets to exchanges are at their lowest levels in seven years, per data from on-chain analytics platform CryptoQuant.

“The flow of movement from Bitcoin miner wallets to exchange wallets ultimately represents the activity of these entities in the open market,” contributing analyst Caue Oliveira wrote in one of its Quicktake market updates.

“The entry of coins into exchanges increases the liquidity of BTC on these platforms, providing additional selling pressure in the market.”

Bitcoin miner exchange flows chart. Source: CryptoQuant

Oliveira noted that miners are always selling some portion of their holdings, but the current 90 BTC monthly average is the lowest since 2017.

Bitcoin exchange balances resume downtrend

After a month of turmoil caused by withdrawal shut-offs and legal action against some of the biggest crypto exchanges, BTC balances are trending down once again.

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In line with the broader trend in place for five years, exchanges’ stocks of BTC are drifting ever lower.

According to the latest data from on-chain analytics firm Glassnode, the combined holdings of the major exchanges totaled 2.332 million BTC as of Nov. 26.

With the exception of recent lows in October, this is the smallest amount of available BTC since April 2018. At its peak in March 2020, just after the COVID-19 cross-market crash, the tally stood at 3.321 million BTC.

Bitcoin exchange balance chart. Source: Glassnode

The picture was complicated in November thanks to traders’ reactions to Binance receiving a record $4.3 billion U.S. fine , along with Poloniex and HTX halting withdrawals altogether after a hack.