Bitcoin (BTC), which is now at the beginning of another week, has Chinas latest ban behind it. But its next “FUD story” is already in motion.
The United States has put back its infrastructure bill, and this week will likely see a vote on what might shake up cryptocurrency businesses.
However, both the fundamentals and on-chain metrics continue to be bullish and traders are betting that there will be a moderate price drop to $36,000 or less.
What are the odds of success? Cointelegraph looks at five factors that could affect the market in the next week.
D-Day infrastructure bill
As lawmakers make decisions about the fate of the “infrastructure bill,” the macro narrative shifts from China to America.
H.R.3684 is fresh from Senate approval and should be up for a final vote Monday, despite rumors to the contrary.
The bill contains a controversial description of a broker, which could have wide-reaching consequences for U.S. cryptocurrency businesses. There are still efforts to amend the bills language with Wyoming senator Cynthia Lummis, and advocate Caitlin Lang leading the charge.
A broker is defined as “anyone who (for consideration), provides any service that results in the transfer of digital assets for another person.”
. @SenLummis just shouted out to Sen. RonWyden for their partnership against the broad definition of “broker” in the infrastructure bill. She said that this relationship will be important to our industry in the future as he is the chair of the Senates tax writing committee. #WyoHackathon https://t.co/QRSzn1ilqH
— Caitlin Long (@CaitlinLong_) September 25, 2021
As of September 27, 539 amendments had been made to the bill.
Although H.R. 3684 is a potential thorn in local crypto industrys side, it arguably doesnt matter to experienced Bitcoin hodlers.
Market sentiment is still sensitive to FUD stories, despite the recent China “ban” scandal.
“Bitcoins bipartisan nature is a good thing.” “Digital assets are apolitical,” stated Senator Lummis on Twitter, ahead of the voting day.
Crypto markets to experience “Green Week”
BTC spot price action will be retold as BTC/USD rises to $44,400 on Monday.
This signals the beginning of resistance, which eventually led to rejection last week when the pair briefly crossed $45,000.
This attempt to break free has failed to succeed so far with $44,000 not holding at the time this article was published.
However, the latest progress is quite refreshing when compared with the forecasts of a return in the mid-$30,000 range as late as Sunday.
“Im expecting a green week for Bitcoin,” Cointelegraph contributor Michael van de Poppe summarized late Sunday.
BTC/USD 1-week candle chart (Bitstamp). Source: TradingView
The weekly close, which has been a source for contention in recent days was at $43,144. This is higher than the minimum cut-off points some traders highlighted.
Analyst Rekt Capital, a trader and analyst, had requested a $43,600 closing value. This was not met on time but arrived hours later.
He added that BTC “continues to be sandwiched between the Pi Cycle-111-day MA support, and this immediate red resistance zone,” in additional comments.
“This price compression is in fact forming a clear marketplace structure here, possibly an early-stage Ascending Triangle.”
BTC/USD scenario. Source: Rekt Capital/ Twitter
Lightning Network tops fundamental growth
Bitcoin network fundamentals are smiling for another week, as the estimates suggest a sixth consecutive increase in difficulty.
Data suggests that Bitcoin will see an additional upward adjustment in difficulty in the next eight days, following last weeks fifth consecutive increase — which is a rare feat by itself. This would mark the six consecutive increases that Bitcoin has made since mid-2019s seven.
Its not just about difficulty. The hash rate now stands at around 145 exahashes/second (EH/s), and is only 23 EH/s from its all-time highs.
These stats prove the conviction of miners as well as the extent of their return since Chinas mass exodus four months ago.
The story for the consumer side is even more impressive. After its El Salvador adoption success story it is now close to 3,000 BTC capacity. This capacity has almost tripled since the beginning of 2021.
“Public Lightning Network capacity just passed 2,900 BTC. Kevin Rooke, investor, commented on the accompanying chart that over 400 BTC have been added in the past 10 days.
“Find me an even better looking chart and Ill wait …”
Bitcoin Lightning Network capacity vs. BTC/USD chart. Source: LookIntoBitcoin
Lightning is a protocol known as “Layer 2”, which allows for the settlement of BTC transactions off-chain immediately and at almost zero cost.
Twitter was the first major partner to enable Lightning Network tipping in payment gateway Strike last week.
Crypto market investors have a tendency to be cold feet. The Crypto Fear & Greed Index is a sentiment indicator that shows how nervous they are.
The Index, which uses a variety of factors to determine sentiment, fell to its lowest level since mid-July, just before BTC/USD started its run to $53,000.
However, this time it is $40,000 and not $30,000 which is the price focus.
The Index was slightly higher at 27/100 on Monday — but still within the “fear zone”.
Chart of the Crypto Fear & Greed Index. Source: Alternative.me
Negative funding rates are used by institutional circles to encourage cautious optimism about the possibility of sustained upside.
Analysts often point out that just when everyone is being bearish, its a good time to short BTC and trip up most of the speculators.
“Never give up …”
These words and other parts from Rick Astleys 1987 song have become a common meme among Bitcoiners.
Related: Top 5 Cryptocurrencies to Watch This Week: BTC. AVAX. ALGO. XTZ. EGLD.
These are the investment habits and mindsets of hodlers who dont sell their BTC no matter what the circumstances.
Long-term market participants find it a motivating force to persevere through any storm. But, right now, the “Rick Astley” investor could be pointing the way towards new all-time highs.
Bitcoin “Rick Astley” investment phases vs. BTC/USD chart. Source: Willy Woo/Twitter
Willy Woo, analyst, noted that the Rick Astleys have worked hard and are enjoying good times.
He stated that Bitcoin has entered the Never Going to Give Up phase of the Astley Cycle, and he also presented a chart showing Rick Astleys buying habits in relation to BTC price action.
Many people are not expecting the effects to arrive sooner than they think. Van de Poppe declared it time to “party” in Bitcoin and other altcoins, despite a $2,000 jump on Sunday.
Lets get back to the markets. #Bitcoin is having a good bounce
— Michael van de Poppe (@CryptoMichNL) September 26, 2021
Cointelegraph reported that strong hands control a growing portion of the BTC supply. This figure has reached its highest level since October 2020.