The Bitcoin (BTC) award will face two critical events on December 1, just after the weekly and monthly lights close. Of particular note is the end of the next weekly light, as it may signal the first weekly red light since the end of September.

The monthly candlestick will go a long way because it will mark the highest close in Bitcoin history if the price stays above $ 13,791.

Bitcoin has experienced ups and downs. Source: Cointelegraph Markets, data on digital assets.
There are three main factors that can lead to a sharp increase in Bitcoin volatility at the end of the weekly and monthly candlesticks. Factors include general uncertainty about BTC price, standard futures trading activity, open interest rate and extended weekly schedule.

Meanwhile, traders were cautious and expected a retreat in the near future, despite a $ 16,500 rebound on November 28.

There are two main trends that can drive Bitcoin’s recovery. First, Guggenheim Investments, a global asset management company with over $ 233 billion in assets under management, has won the right to invest $ 500 million in the Grayscale Bitcoin Trust.

In the United States, where there is no Bitcoin Trading Fund (ETF), the Grayscale Bitcoin Trust is the first entry point for most institutional investors. The news triggered significant buying activity in the options market, reports Deribit. The company stated:

Reports for the Behemoth Guggenheim Macro Opps Fund, which is looking for $ 500 million, released over the weekend, unexpectedly revealed a lack of TA + funding when BTC returned 2k from the low. Quiet alternative market for the week. December calls purchased with co-financing; The hedges wither away. ”
Second, wealthy investors and blue whales can buy shares pending Monday. In recent weeks, quantitative traders have indicated that most purchase orders have come from the United States.

Some suggest that the demand comes from TWAP algorithms that are often used by funds and mutual funds. Since the TWAP algorithms will be activated on Monday, this may increase buyers’ demand for BTC.

Traders are usually unsure of the direction of the bitcoin price.
There is a high degree of uncertainty at the moment in the cryptocurrency market, as traders are divided over where the price will go next.

Some are sure that BTC probably ended up this weekend due to market trends. For example, Avi Felman, chief trading officer at BlockTower, said the recent downturn in Coinbase has made BTC stronger hands.

Selling during a beef market can be too big, especially since traders often look for reasons to sell. Thus, over-indebted buyers are caught by local managers, leading to repeated playoffs. But BTC often tends to recover properly when traders expect a further pullback and market sentiment hits a low level. Flement explained:

“For the first time decently expanded Coinbase sales on a local day. This rally indicates to me that retail is growing steadily. A fairly clear transition from weak to strong hands in the last 48 hours. Bull market setbacks always give you a silver lining for reasons. “Sell.”
In addition, several technical indicators indicate that Bitcoin is neither overbought nor oversold in lower time frames.

On the daily chart, for example, the Relative Strength Index (RSI) for BTC is around 55. An asset is considered to be oversold on the RSI if it falls below 35. Bitcoin is thus in a pinch due to the higher time frame shown on charts. stay. Like the weekly chart, it is in the overbought zone.

This led traders to speculate that a possible correction of the support range between $ 13,000 and $ 14,000 could soon occur. This high level of uncertainty in the market can lead to increased volatility when new weekly and monthly lights are opened.

Open interest in futures exchanges is likely to increase again, increasing the likelihood of significant price fluctuations.

Whales are becoming more active in Bitcoin futures
During the Bitcoin rally in recent weeks, trading activity on the largest BTC futures exchanges has increased regularly. Despite the recent decline, open interest in futures trading platforms still exceeds $ 1 billion. When open interest is high, the probability of a short or long squeeze increases, which can lead to sharp increases in volatility.

Bitcoin futures sizes. Source: Cointelegraph Markets, data on digital assets.
In particular, the Chicago Mercantile Exchange (CME) has seen a marked increase in trading activity in bitcoin futures. Interestingly, Arcane Research reported that top traders with a minimum position of 25 BTC more than doubled on the Chicago Mercantile Exchange by 2020.

Source: CoinTelegraph