Bitcoin reclaims $17,000 as bulls strengthen

• Optimism that the Fed will slow the rate of interest rate hikes has led to a BTC price rally ahead of Fed Chair Jerome Powell’s speech.
• While big players like BTC miners and whales have sold their holdings, small Bitcoin investors like Shrimps (< 1$BTC) and Crabs (up to 10 $BTC) has accumulated strongly over the past 30 days.

After facing heavy selling pressure earlier this week, the world’s largest cryptocurrency – Bitcoin (BTC) – rose over 3 percent today and regains the $17,000 level. This is the first time in two weeks that the BTC price can be seen above these levels.

With this, Bitcoin has also recovered nearly 10 percent from its 2022 low of $15,500. The recent Bitcoin price surge comes ahead of the speech by Federal Reserve Chairman Jerome Powell on Wednesday, November 30. Market analysts have been expecting a slower pace of rate hikes in the US leading to the current optimism.

Later today, Jerome Powell will speak at an event hosted by the Brookings Institution. After four consecutive 75-basis-point rate hikes earlier this year, some Fed officials also expect Powell to slow down a bid. Thus, the final interest rate hike from the Fed for 2022 will probably be 50 basis points. Speaking about this development, Hayden Hughes, CEO of social trading platform Alpha Impact said:

Overnight there has been increasing commentary around the perception that the Fed will raise interest rates by just 50 basis points. Since crypto typically leads other asset classes, we could see stocks rally” as the mid-December Fed meeting approaches.

The rapidly tightening monetary policy has been one of the reasons behind the strong selling of crypto assets this year. Of course, the collapse of some key players like Three Arrows Capital (3AC), Celsius, Networks, FTX, etc. has further aggravated the matter.

On-chain data for Bitcoin

Today’s Bitcoin price rally comes amid greater optimism in the broader cryptocurrency market. After making a move above $17,000 earlier today, the BTC price has partially retreated to $16,888 as of press time.

However, on-chain data shows that Bitcoin miners have entered a strong capitulation phase and have been aggressively selling their BTC holdings throughout this month of November. In its latest report, on-chain data provider Glassnode explains:

A consistent event that motivates the transition from a bear back to a bull market is the dramatic realization of losses, as investors give up and capitulate on a large scale.

November has seen the fourth largest capitulation event on record, with a 7-day realized loss of -$10.16 billion. This is 4.0 times greater than the peak in December 2018, and 2.2 times greater than March 2020.

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Item: Glass node

Bitcoin price has corrected by more than 20 percent this month, making it the worst November in cryptocurrency history. At the same time, the Bitcoin hash rate has also started to turn in a not-so-good sign for miners. The Bitcoin hash rate is down 13.7 percent from a record high, on an average seven-day period. During the next Bitcoin mining difficulty adjustment, the hash rate may drop by 9 percent.

Item: Glass node

Bitcoin shrimp and crab buyers

While big players like BTC miners and whales have sold their holdings, small Bitcoin investors like Shrimps (< 1$BTC) and Crabs (up to 10 $BTC) has accumulated strongly over the past 30 days. Below is the data from Glassnode regarding aggressive BTC purchases from this group.

#Bitcoin Shrimp (< 1$BTC) has added 96.2k $BTC to its holdings since the FTX collapse, an all-time high balance increase.

This group now has over 1.21 million $BTCequivalent to 6.3% of the circulating supply.

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— glassnode (@glassnode) 28 November 2022