Bitcoin: the first signs of a breakthrough?
On Monday evening, according to Coinmarketrate.com , the price of Bitcoin has plummeted from $31,500 to $29,500. Bitcoin started to recover again late last night. Initially, of course, the $30,000 level had some resistance, but the price broke through it the day before yesterday afternoon and then rebounded back to $31,500.
However, Bitcoin was rejected there again, and then fell back to $31k. Then the price fluctuated back and forth to $31,500, and back to $31,000.
The chart of the price movement of the BTC. Source: Coinmarketrate.com
However, around 5 a.m., Bitcoin lost its grip at around $31,000, and briefly dropped below $30k, but then found support around $30,300. This morning, the BTC was able to rise slightly again, and currently the BTC price is about $ 30,500.
Bitcoin Price Forms an ascending Triangle
Compared to May, last week the BTC price began to test the upper limit of the current range more often. The lows also began to move higher, as a result of which the price formed a so-called ascending triangle.
The chart of the BTC/USD. Source: TradingView
This could be a sign that Bitcoin is looking to break out upwards. However, whether the price has enough volume and momentum to really grow remains to be seen.
Even more volatility in CPI on June 10
Due to the poor macroeconomic situation, we will still have to reckon with new lows in the near future. The situation may change if the Federal Reserve still decides to be more cautious in its monetary policy. This will largely depend on how high inflation will be in the United States. This Friday, June 10, the consumer price index will be published in the United States, which may cause increased volatility in the markets. Do not forget about the US dollar.
How low is the Bitcoin bottom?
If the CPI turns out to be below expectations, we may see a so-called relief rally. Perhaps Bitcoin will finally break through $31,500-$32,000, and may test $34,000-$35,000.
However, failure here can still lead to new lows. If the macroeconomic situation is not favorable, Bitcoin may break down to this point.
What happens inside the range and what happened at the maximum of the range shows that this is a pure redistribution range. Source: TradingView
Analysts still strongly disagree on where the bottom of Bitcoin is and whether it has already been reached. The analyst of Rekt Capital once again explains why BTC can still fall to the 200-week moving average and even break through to $20,000.
BTC tends to confirm maximum financial opportunities when it reaches and breaks down from the black 200-week EMA. Source: TradingView
The number of Bitcoin users is declining, miners are under pressure
In addition, Ali Charts analyst reports that the number of Bitcoin addresses is in a downward trend and has a high correlation with the price. Therefore, he believes that there must be a significant increase in the number of users first before the price is raised.
Yesterday, in an update of the Bitcoin market, it was reported that the miners of the BTC are now under pressure due to the relatively low price and high degree of complexity.
Bitcoin Funds Receive $125 Million Inflows, Investors “Buy “Dips”
Bitcoin funds seem to be gradually gaining momentum. Cryptocurrency investment products for the second week in a row show a net inflow of funds after a huge outflow a week earlier. This was announced on June 6 by James Butterfill from CoinShares:
Institutional Investors Choose Bitcoin
Currently, investors prefer “safer” Bitcoin to riskier altcoins. Last week, the net inflow of investments into BTC amounted to 125.9 million dollars. According to CoinShares, this shows that institutional investors are “buying failure.” Thus, the total inflow of funds to BTC in 2022 will amount to 506 million US dollars.
Ethereum (ETH), however, is not in demand yet. Net outflow of funds from Ether Funds amounted to 31.6 million.$ for the ninth week in a row. The total outflow of ETN products in 2022 will already amount to $ 357.4 million.
However, this is only 7% of the total assets under management (AUM) held in ETH funds. Meltem Demirrors from CoinShares believes that the reluctant attitude towards Ether products may be due to the upcoming “merger”, as a result of which the network will switch to Ethereum 2.0 and Proof-of-Stake (PoS).
Other major altcoins such as Litecoin (LTC), Solana (SOL), Cardano (ADA) and Ripple (XRP) were also not in high demand last week. For these products, AUM remained at about the same level. It also shows that investors prefer Bitcoin for now. The so-called multiactive products last week showed a small positive inflow of $4.3 million.
This means that the total net inflow of funds into crypto-investment products last week reached $99.5 million. The total amount of AUM for all products now amounts to 39.8 billion US dollars.
The difficulty of mining Bitcoin is growing again, despite the price drop
The computing power of the BTC network seems to be stabilizing after a period of ups and downs. Yesterday, the difficulty level was revised upward by 1.3%. This increase came after a 4.3% drop at the end of May and shows that computing power has increased slightly.
On June 8, there was another adjustment of complexity – an automatic mechanism that supports the balance of the Bitcoin network. After the adjustment, Bitcoin mining became 1.3% more difficult.
This is not a serious adjustment, as at the end of May. At that time, the difficulty was adjusted downward by 4.3%. The adjustment occurs approximately once every two weeks after 2,016 transaction blocks.
Over the past two weeks, the average hashrate, or computing power, has been 216.54 exahashes per second (EH/s). This is a slight increase compared to 213.92 EH/s over the previous two weeks.
Complexity is the mechanism that makes Bitcoin mining harder or easier. If the miners decide to wind down their activities, the difficulty will be reduced to facilitate the mining of BTC again. This is done in order to maintain a block time of about 10 minutes and motivate miners to contribute to the security of the network.
Therefore, we can talk about some stabilization among Bitcoin miners. With the fall in the price of BTC, it becomes less and less profitable for miners to mine coins. However, the decrease in computing power, thus, will not happen yet.
In the latest news about Bitcoin mining, we read a few days ago that these miners sold part of their BTC. This was supposed to soften the blow to their profitability caused by falling prices.