Bitcoin Faces Potential Dip to $61,000 Amid Trendline Support Test
Summary:
Bitcoin (BTC) faces the possibility of a drop to $61,000 amid another support test of its trendlines. The cryptocurrency slowly erased the week's gains and lacked significant upward momentum. Classical bull market levels, such as the 100-day simple moving average and the short-term holder realized price, are back in focus. The latest price movements have also affected the network fundamentals including Bitcoin mining difficulty, showing an impending drop of about 5.5%, the largest single downward adjustment since the 2022 bear market end.
The likelihood of Bitcoin (BTC) dropping to $61,000 on May 9 raised concerns as it underwent another assessment of its trendlines support. BTC/USD 1-hour chart. TradingViewBTC tracked the BTC's price fluctuations as it followed a downward curve, gradually wiping out the gains of the past week. Despite the potential liquidity provided by short-term volatility in the order book, the upward momentum of BTC/USD remained largely dormant, drawing attention to the 100-day simple moving average (SMA) and short-term holder realized price (STH-RP). As mentioned before by Cointelegraph, these levels are traditional indicators of bull market support, with the temporary fall to $56,500 last week not causing any prolonged breach of these parameters. As it stands, the figures for the 100-day SMA and STH-RP - the collective cost basis for Bitcoin speculators – came up to $61,200 and $60,100 respectively. Source: A glance at Bitcoin STH-RP by Look Into Bitcoin. Popular trader Skew, in a recent post on X (previously known as Twitter), called attention to the vital importance of the 100-day SMA and the monthly opening figure of $60,600 (“pretty important”) in larger timeframes. He added that although there were bids of 100BTC, evident proof of seller absorption pointing to a solid confluence of demand was yet to be seen. BTC/USD chart. Source: Skew/XCoinGlass, a resource monitoring platform, authenticated a pool of bid liquidity slightly below the $61,000-mark; however, Bitcoin has yet to test these waters on the present day. There's someone directing the price reduction in order to generate sell-on-bounce liquidity. At some point, the opposite scenario might take place (bid) to test ask liquidity. A snippet of the Bitcoin liquidation heatmap on CoinGlass. The latest price shifts in BTC also affected the network fundamentals. As Bitcoin inflows recede to a ten-year low after reaching an all-time peak of $74k, BTC.com data indicates the impending drop of Bitcoin mining difficulty by 5.5%, marking the largest single downward adjustment since the bear market conclusion in 2022 when BTC traded at less than $20,000. Currently, the difficulty levels peak at an all-time high of 83.23 trillion. Pennyether, a mining analysis account, pointed out on platform X that the hash rate seemed to be dipping. But the difficulty, rather than the network hash rate, is what counts for miners. Miners will be unable to mine more Bitcoin per EH/s until the difficulty is calibrated downwards, a situation that recurs every 2016 blocks, roughly a 14-day period. "If we assume a -7% adjustment, the 'difficulty hashrate' will be around 585 EH/s. My post-halving estimation projected a figure less than that, at 560 EH/s, given the current hash price of $50.” The status of Bitcoin network fundamentals summarized on BTC.com. An important note: this article does not provide investment advice or recommendations. Every trading or investment action comes attached to risks, and it's advisable for readers to carry out their own research prior to decision making.
Published At
5/9/2024 12:05:00 PM
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