After the New Year holidays, BTC prices slightly recovered, hitting a low of 6850 USD before bouncing back up 7.3% to reach 7350 USD. The 10-day moving average continued to rise above the 20-day and 50-day moving averages. BTC seems to have regained its upward momentum, but as can be seen from the K-line (candlestick) chart, after the latest increase, both bullish and bearish positions are being taken in the market, reflecting investor uncertainty about the future direction of the market. With reference to our analysis of BTC’s historical price performance data (see above), a softer trend is indicated for this week, with lower trading volume.
(data source：CoinMarketCap, Investing.com)
BTC continues to show it is an uncorrelated asset
In our analysis of the price movement of BTC against other alternative asset classes, our correlation analysis continues to demonstrate that BTC moves independently of other non-crypto assets. Its highest correlation remains with ETH.
BTC Market Panic Index
The BTC market panic index is calculated on the basis of volatility. Based on the CBOE calculation method for the S&P VIX index, we used the near- and next-term put and call BTC options to calculate the VIX trend chart for this week (The lower the VIX, the less panic there is in the market).
News of the week
2020 will see the third ‘Halvening‘ of Bitcoin mining rewards. The reduction in output benefits the price of Bitcoin, yet it will cause great pressure on the mining machine market, since mining output rewards will be reduced from 1800 to 900 BTC per day. In the meantime, the increasing difficulty of calculating the algorithm to unlock new blocks will raise the cost of mining devices. Given the price performance of previous halvings, BTC is likely to rise, which may, in turn, provide some support to the mining market.
Following the completion of the Muir Glacier hard fork upgrade on the Ethereum blockchain, the ‘difficulty bomb’ (of mining new Ethereum blocks) will be delayed by 4 million blocks. This is expected to lead to a reduction in transaction costs on the Ethereum network, while supporting the development of Eth2.0.