Bitcoin (BTC) begins its beginning full week of 2022 in familiar territory below $50,000.

After ending December at $47,200 — far beneath the bulk of bullish expectations — the largest cryptocurrency has a lot to live up to every bit signs of a halving cycle pinnacle remain nowhere to be institute.

With Wall Street set to return afterward stocks conversely ended the year on a loftier, inflation rampant and involvement rate hikes looming, 2022 could presently turn out to be an interesting market environment, analysts say.

And then far, even so, all is calm — BTC/USD has produced no major surprises for weeks on end.

Cointelegraph takes a expect at what could change — or continue — the status quo in the coming days.

Stocks could see 6 months of "up only"

Look no farther than the S&P 500 for an example of the state of play when it comes to United Land equities.

The alphabetize accomplished no fewer than 70 all-fourth dimension highs in 2022, rounding out the year with a flourish, fifty-fifty as risk assets looked far less appetizing.

Bitcoin was among them, trailing beneath the $fifty,000 marking with the only noticeable events coming in the form of peaks and troughs around thin holiday liquidity.

With that said, central bank policy is widely tipped to provide a potential true cat among the pigeons in the coming months. The U.S. Federal Reserve has signaled two involvement rate hikes this year, and the market's power to blot them is seen every bit a key exam for asset performance.

For the first clamper of the year, notwithstanding, it may well exist a continuation of the latest flavor of "business as usual" — stocks adding to all-time highs.

"History suggests the first of rate rising regimes actually issue in stock market place strength for 6 months," Charles Edwards, founder of nugget manager Capriole, noted in a serial of tweets this calendar week.

"ten of the 13 regimes (77%) since the 1950s had positive stock market place returns over the first six months, averaging +five.1%. Nosotros are approaching the beginning of a new regime now."

Edwards said that while such circumstances are generally "good" for Bitcoin, upheaval further downward the line would likely hateful that stocks take a chirapsia in the long term thanks to the rate hikes.

"Without significantly higher economic growth (yet to exist seen), information technology is unlikely any rate ascension programs by the Fed will have a long runway," he continued.

"Bitcoin will be volatile in this period, both an effect of stock market place volatility, but too from sharp Fed course corrections."

Aggrandizement will be on the radar once again next week, with January. 12 scheduled for the latest U.S. consumer cost index data for December.

U.Southward. inflation chart. Source: Trading Economics

$40,000 stays back up flooring

Bitcoin spot price activity has provided precious little by way of interesting cues lately, staying in a well-defined range.

A tussle between bulls and bears has in fact been somewhat underwhelming in nature beyond rhetoric found on social media — volumes are thin, interest from retail is low, and large players continue to maintain sell levels nearby.

Responding to levels to watch from Cointelegraph contributor Michaël van de Poppe Sunday, popular trader and analyst TechDev agreed that $48,000 represents "a little brick wall."

To the downside, van de Poppe said that he was eyeing the area betwixt $40,000 and $42,000, with action in a higher place that corresponding to "accumulation."

Bitcoin, however, has a habit of upending fifty-fifty the strongest trend at the least expected moment.

For boyfriend trader Pentoshi, there is piddling cause for commemoration at levels much below $60,000, these last appearing over a month agone.

"I will long logical areas in a downtrend. I will exist macro bearish until 58-60k reclaim. And bullish at local areas," he summarized most his position over the weekend.

Pentoshi and others urged a pivot to Ether (ETH) on the basis of altcoin strength, thus providing a convenient fashion to "de-risk" with Bitcoin underperforming.

That strength is captured in Bitcoin's market capitalization potency, which has now slipped under twoscore% for the get-go time since May, information from TradingView shows.

Bitcoin potency 1-week candle chart. Source: TradingView

On-concatenation metrics predict "sustainable cost trend"

For those looking for a silverish lining to the uninspiring price action, on-chain metrics provide no shortage of relief.

The further away the market gets from concluding month's snap correction, the more enticing Bitcoin looks as an investment punt based on historical trends.

In its latest newsletter issued December. 31, Capriole director Ryan McCoy highlighted the shifting tide in investor selling habits as aligning with the latter stages of previous corrections.

Of particular interest is the brusque-term holder spent profit output ratio (SOPR) from on-concatenation analytics firm Glassnode, which shows the extent of gains or losses from recently spent coins — specifically those that last moved in the by 155 days.

Currently, with a median score below 1, SOPR shows that coins spent at a loss are declining in numbers — a potential form of seller exhaustion.

"Typically, when this metric starts to bottom and and so rise, a more than sustainable toll trend has begun," McCoy explained.

"The 30-solar day median is still beneath 1 (implying that the average cost of the coins moved is lower than the price they were purchased at), merely signs of life like this afterward a substantial corrective event suggest we are likely in the latter stages of the current correction."
Bitcoin short-term holder SOPR (thirty-solar day moving average) chart. Source: Capriole

Cointelegraph has reported extensively on hodlers' habits when it comes to BTC, and long-term investors remain steadfast in their confidence not to sell.

"Despite the -38% driblet since Nov, Long-Term Holders keep to diamond paw Bitcoin," McCoy summarized.

"The last time Bitcoin was at $47K, long-term holdings were 10% lower. To date in that location has been insignificant distribution despite the volatility. That's bullish."

Fundamentals have (almost) never been better

Standing the positivity, network fundamentals underscore the potent belief of another cohort of essential Bitcoin market participants.

Miners, despite seeing all-fourth dimension highs of $69,000, are accumulating, not selling, their coins.

At the same time, the network hash charge per unit is at all-time highs of its own, these last seen in March and April before the upheaval of the Chinese ban sparked months of migration.

Should the former aphorism of "price follows hash charge per unit" remain true, miners' religion in the long-term profitability of Bitcoin provides a key indicator of where the market place is going.

"Metrics like this are finer erstwhile-guard fundamental outlook material and are largely disregarded by newer and sexier methods of explaining price dynamics, supply and demand, only cannot be ignored for their power to explain institutional and infrastructural support for securing the protocol that at this signal effectively underpins the entirety of the crypto economy," Capriole added.

Bitcoin hash rate chart. Source: MiningPoolStats

The hash rate is currently over 190 exahashes per second, according to estimates from MiningPoolStats.

Later this week, meanwhile, Bitcoin'southward network difficulty is prepare to increment by effectually 2.4%.

Bitcoin difficulty nautical chart. Source: Blockchain.com

This reflects the competitiveness of the electric current mining mural, and difficulty should before long tackle 25 trillion again for the first time since the pre-China peak, data from Blockchain.com shows.

With every increase, difficulty reinforces network security, creating an even more robust ecosystem.

How sustainable is "extreme fear" this time?

Bitcoin sentiment began 2022 with serious cold feet, the Crypto Fearfulness & Greed Alphabetize measuring "farthermost fear."

Related: Height 5 cryptocurrencies to lookout this week: BTC, LUNA, FTM, Cantlet, 1

As Cointelegraph reported, investor emotions have become highly sensitive to even smaller price movements within the current range.

Fright & Greed reflects this, moving up eight points since the weekend despite toll activity offering little change.

At the time of writing, the Index measured 29/100, nevertheless in the "fearfulness" zone.

Crypto Fear & Greed Index. Source: Alternative.me

Every bit noted by on-chain analytics resource Ecoinometrics, meanwhile, such sentiment has historically failed to play out for long.

"Bitcoin is back in extreme fear. Historically that ways in that location is express downside at 30 days," it tweeted alongside a chart compiling the index and BTC/USD.

Crypto Fright & Greed Index vs. BTC/USD chart. Source: Ecoinometrics/Twitter