Bitcoin (BTC) starts a new week still riding high near $37,000 as macroeconomic data returns to the fore.
The largest cryptocurrency continues to circle its highest levels in 18 months, with excitement over a possible exchange-traded fund (ETF) approval in the United States driving sentiment.
That is getting increasingly greedy, however, as according to the Crypto Fear & Greed Index, conditions match those seen as BTC price action hit its current all-time highs in late 2021.
What could shake up the status quo to produce volatility in the coming days?
The odds of an external trigger are more significant this week. A raft of U.S. macro data, including the Consumer Price Index (CPI), has the potential to disrupt any sideways trading activity across risk assets.
Multiple officials from the Federal Reserve are also due to speak, while the precarious geopolitical situation in the Middle East grinds on in the background.
On the institutional side, meanwhile, the future looks firmly bullish for Bitcoin — ahead of the prospective ETF approval, the Grayscale Bitcoin Trust (GBTC) is closing in on parity with net asset value.
Can Bitcoin markets stay the course and avoid a significant retracement? Cointelegraph takes a look at conditions in the weekly rundown of BTC price volatility catalysts waiting in the wings.
Funding rates flash warning with BTC price stuck at $37,000
Bitcoin’s weekly close set a new 18-month high on Nov. 12, but what followed was not the gains seen after other recent closes.
During the Asia trading session, BTC/USD instead fell below $37,000, sticking firmly to the trading range in place throughout the weekend, per data from Cointelegraph Markets Pro and TradingView.
Monitoring the situation, popular trader and analyst Credible Crypto suggested that this would soon change. The reason, he said, was open interest (OI), now at multi-day highs and apt to spark volatility.
“OI has ramped right back up off the lows which means more positions to squeeze out,” part of an X post read.
Credible Crypto gave a target of $36,600 for a potential local low, with another post adding that Bitcoin was “very close” to further upside.
Countering the optimism over short-term market action was funding rates. These were not only positive, but at their highest since Bitcoin’s November 2021 all-time highs, indicating an overall disadvantage of being long BTC at current levels.
“Pretty elevated levels of funding rates across the board,” fellow trader Daan Crypto Trades commented alongside data from monitoring resource CoinGlass.
“Even though this isn’t always an immediate reason for a flush, ideally this goes back to normal after some more ranging. Good to note that during strong up trends, this can stay this way for weeks or even months.”
Also noting the conspicuous state of play on funding, popular analyst Cauê Oliveira told traders to exercise caution.
“This value suggests that optimism is prevailing in the market, driving a high number of futures contracts to bet on an increase in price,” he wrote in a Quicktake market update for on-chain analytics platform CryptoQuant on Nov. 10.
“However, this setup is dangerous as it can demonstrate excessively bullish sentiment and a price contraction could trigger a cascade of liquidations.”
CPI comes amid fresh U.S. government shutdown turmoil
A classic macro setup marks the third week of November — CPI leads a deluge of data prints that have sparked risk asset volatility in the past.
Due on Nov. 14 for the month of October, the CPI print is keenly watched by inflation monitors, with the Producer Price Index (PPI) following a day later.
Various Fed officials will also take to the stage in speaking engagements both during and after the data releases, providing insights into the Fed’s perspective on inflationary forces in real time.
“Important week for inflation and the Fed,” financial commentary resource The Kobeissi Letter summarized while uploading significant macro diary dates to X.
Adding to the mix is another familiar wildcard — a partial U.S. government shutdown in the making. While so far avoided this year, the need to reach a deal on spending in Congress is once again becoming tangible ahead of the Nov. 17 deadline.
Should it occur, the shutdown would only be the fourth in the U.S. in the past 10 years.
Altcoins in focus as crypto capital inflows return
With a potential ETF approval firmly on the radar for crypto market participants, capital inflows into the industry are being keenly monitored.
Buyer interest forms a key item on the list for a bull market comeback, and the about-turn in inflows is already attracting mainstream attention.
“For the first time in years, crypto markets are beginning to see tons of new liquidity,” Kobeissi wrote in a dedicated X post.
It noted that the combined crypto market cap has increased by $600 billion since November 2022, in the aftermath of the FTX meltdown and Bitcoin’s cycle lows of $15,600.
“That’s a +75% jump in one year while Bitcoin is up +120% over the last year,” it added.
“This comes after years of consistent outflows from crypto markets. One thing we have seen multiple times in the past? A return of liquidity always causes historic moves in crypto.”
It is not just Bitcoin showing potential — altcoin markets are waking up, traders and analysts say.
This continues to be aptly displayed by the Crypto Fear & Greed Index, the classic market sentiment gauge, which is now at levels last seen in November 2021.
While not at its extreme levels yet, the index unequivocally shows that the average crypto investor is nearing a state of irrational exuberance.
Fear & Greed stood at 72/100 on Nov. 13, having hit 74/100 on Nov. 6.
Commenting on market psychology at the start of the month, popular trader Pentoshi reminded X readers that extreme levels of both fear and greed can offer the “best opportunities” for those able to time and exploit market volatility at extreme sentiment levels.
Typically, when the index is either below 10/100 or above 90/100, crypto markets are in line for a snap trend reversal.