- Bitcoin's recovery stalled as the coin failed to move above $7,000.
- The fundamentals imply that Bitcoin may be on the verge of a long-term bullish trend.
Bitcoin has barely moved in recent 24 hours. The first digital asset is changing hands at $6,600 with no clear short-term direction. BTC/USD hit the intraday high at $6,795, but the upside momentum faded away quickly. According to the data provided by Intotheblock, there is a cluster of BTC addresses that has a break-even point in the range from $6,600 to $6,800, which makes this area particularly tough for the bulls.
Bitcoin mining difficulty spikes
Bitcoin's mining difficulty dropped by nearly 16%, which is the second-largest decrease on record. Mining difficulty is one of the essential parameters of the Bitcoin network. It shows how difficult it is to perform mathematical calculations to find a new block and get the reward. The difficulty is adjusted every 2016 blocks depending on the average time spent on discovering the previous blocks.
The sharp decrease of this parameter means that some miners took their equipment offline, which is also confirmed by the collapse of the hash rate. On March 25, it dripped to 75.7 EH/s, down 44 percent from where it was two weeks ago. Due to the sharp hash rate decrease, a block discovery took over 10 minutes.
Small miners dropped out of the game as after a sharp BTC collapse on March 12, they were no longer breaking even. However, the enormous mining difficulty adjustment, which will happen on Friday, around 7:00 GMT, may provide them with much-needed relief.
If history is any guide, such events lead to a substantial price increase of the first digital asset. Thus, the 15% drop of difficulty on Dec. 3, 2018, resulted in BTC/USD rally. The coin gained more than 300% in the first half of 2019. A similar trend was registered after massive reductions in 2011 and 2012.
BTC/USD: Technical picture
From the technical point of view, $7,000 remains the key resistance to be taken out. Once it is out of the way, the recovery may gain traction with the next focus on $8,200-$8,400. This resistance area is created by a confluence of strong technical indicators, including SMA100, SMA200 and SMA50 daily and 23.6% Fibo retracement for the downside move from June 2019 high to December 2019 low.
On the downside, the vital support is created by psychological $6,000. A sustainable move below this level will attract speculative sellers to the market and push the price to SMA200 weekly at $5,500. This area may slow down the sell-off and trigger a recovery.
BTC/USD daily chart
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
XRP ruling by Judge Torres denied in Coinbase lawsuit, yet another blow to Ripple
XRP programmatic sales ruling by Judge Torres completely rejected by US Court in Coinbase lawsuit. US Court rejected Coinbase’ motion to dismiss SEC lawsuit, weighing heavily on Ripple’s legal battle.
Sushi price eyes $3 after clearing key weekly resistance level
Sushi price flips the $1.628 resistance level into a support floor after a month of struggle. A temporary retracement might be a good opportunity to accumulate SUSHI before a retest of $3. A breakdown of the $1.267 barrier would invalidate the bullish thesis.
Bitcoin Price Outlook: Will $150 billion bank Morgan Stanley send BTC to new ATH?
Bitcoin has recorded increased volatility this week, with most of BTC holders currently in profit. As market activity continues to grow with long-term holders now ramping up on distribution pressure, the pioneer crypto is bearing the brunt of growing overhead pressure.
Coinbase loses first round of battle against SEC
A day after the SEC filed a lawsuit against Binance last year, it went after Coinbase in a sign that the clampdown is extending to key players in the industry. The latest development in the matter is that the court has ruled in favor of the financial regulator, which means the case will continue.
Bitcoin: BTC may have recovered, but is it out of the woods?
Bitcoin’s (BTC) upward momentum has shown a significant decline for the past two weeks or so. This development led to a bearish signal on the weekly and an uncertain outlook on the monthly.