Bitcoin (BTC) starts a new week in familiar territory after weekend of strong earnings ended lower – what’s in store?
With a new high near $36,000, the largest cryptocurrency is showing signs of strength, but the old resistance levels are still in place.
Conditions are tough – the constant mining and the price movement associated with it have scared many, and Bitcoin’s most accurate forecasting tool sees a real challenge.
However, with the basics finally showing the signs of life, the Bulls finally have something to celebrate.
Cointelegraph examines five factors affecting the price of bitcoin/usd this week.
Oil and oil stocks and recordsات
Major markets are experiencing another scary mood in the 1920s, thanks to the S&P 500 which sees new full-time hiring seven days in a row.
Encouraging US economic data and the Federal Reserve’s intervention have sent stock indices higher in recent weeks.
“Markets are being evaluated to continue a scenario that could not have been better built,” said Chris Igo, chief investment officer at AXA Investment Managers in the Netherlands, in a note cited by Bloomberg.
An interesting development is oil, which is now at the center of another OPEC+ production line, which itself receives, but raises concerns about the amount of fuel that will be available in August.
With the US dollar stable, stock performance appears to be a potential driver going forward – and this scenario aids traditional Bitcoin price behaviour.
S&P 500 1 Day Light Chart Source: TradingView
The basics are not from the woods
Bitcoin may have faced its biggest challenge ever that cooled off over the weekend, but even that may not be enough to stabilize the ship.
Saturday’s drop of 27.94% easily outperforms anyone who came before, reflecting the impact of the China war on bitcoin mining.
However, according to monitoring resource BTC.com, the next adjustment could see an even bigger drop.
Since difficulty adjustments can only be estimated before they actually occur, and a lot can change every two weeks of the difficulty period, it is difficult to quantify how much to reduce the computation to reflect the true state of the network.
Due to the recent decline, mining has become more financially attractive to many current and potential participants. Over the next 13 days, more miners can start working, which will increase the hash rate and thus reduce the need for further reduction in difficulty.
Analysis of the hash rate activity in recent days indicates that a 180 degree reversal has already occurred: the hash rate increased by more than 90 units per second (EH/s) last week to a low of 83 EH/s.
However, at the time of writing, Bitcoin is on track to reduce the difficulty by another 28.68%.
The popular Dilution Safe Sunday Twitter account along with the annotated difficulty chart noted: “After yesterday’s high of -27.9% adjustment, Bitcoin difficulty is now on par with levels after halving last year.”
However, the price is 263% higher. This shows how profitable Bitcoin mining has become for the competent miners. ”
Average Bitcoin difficulty chart over 7 days. Source: Blockchain.com
BTC Price Afraid To $36000
The retreat in complexity was a good moment at least. From time to time, the price of Bitcoin showed a long-awaited rally and once again returned to the upper boundary of the trading zone.
During the rest of the weekend, the BTC/USD rate practically did not resist, adding around 5% before the close.
1 hour light chart of BTC/USD (Bitstamp). Source: TradingView
What can enthusiasm hide? According to the famous analyst Rekt Capital, the two infamous moving averages (MAs) could become the best friends of bears in the next few days.
As reported by Cointelegraph, BTC/USD saw a death cross last month. This indicates the 50-day moving average has crossed over the 200-day moving average, an event traditionally seen as a bearish signal.
In fact, death crosses haven’t always driven prices lower, but their reputation is still going strong this year.
Now, the current price strength can actually taste if Bitcoin reaches the moving average, which is currently hovering above the spot price.
“When BTC can pull back $36,000… the next big resistance will be the $38,000 range,” Rekt Capital explained on Sunday, adding a pivot card.
“This rally is not only in the overall consolidation area that Bitcoin is currently in… but two EMA $BTC Death Crosses (50 blue and 200 black) are likely to act as consolidation resistances as well.”