Bitcoin

Falling fundamentals for Bitcoin could delay arrival at $ 14,000

Bitcoin (BTC) could see further price pressures this weekas the difficulty of the network is expected to decrease further in five months.

Data from the data source BTC.com appreciate this The next automatic reset in four days will reduce the level of difficulty by 8.3%.

The difficulty was set to retry the June hiring

The difficulty of mining is an essential measure of competition among miners for block grants and, more broadly, the general health of the mining sector.

Falling fundamentals for Bitcoin could delay arrival at $ 14,000
Falling fundamentals for Bitcoin could delay arrival at $ 14,000

Automatic resets play an even more important roleThis enables Bitcoin to hold its own regardless of price movements or other circumstances.

In June difficulty fell 9.3% after a previous 6.3% decreaseThis was the height of the miners’ turmoil following the Bitcoin halving in May.

The halving reduced the block subsidy by 50%, resulting in dramatically different profit dynamics for miners Operation on narrow edges or with older equipment. The two consecutive downward corrections opened up new opportunities for less efficient miners The difficulty was then corrected upwards by almost 15%.

The most recent decline is now due to the end of the so-called “hydropower season”. for Chinese miners. It does this every October when rains in China’s Sichuan province subside and cheaper hydropower runs dry, which drives up costs.

Claim the bitcoin end price hurdle

The domino effect that occurs at a time when Bitcoin tried to break the $ 14,000 resistance for the first time in nearly 18 monthsit can be a longer retreat from this essential level.

As Cointelegraph reported, There are barely any technical resistance levels between $ 14,000 and Bitcoin all-time highs of $ 20,000 As of 2017.

On Tuesday the developer did Matt Odell summarized the process on Twitter:

“In China, the rainy season is over -> hydropower prices rise -> the hash rate falls when miners switch to cheaper energy -> blocks are mined less often until then. Adjust the level of difficulty. “

Odell discussed another result of the reduced miner activity, higher Bitcoin transaction feesthat are up almost 200%.

After June Price movements slowly fell in line with the difficulty and hash rate of the Bitcoin network. Thereafter, as both metrics rebounded, price made its own comeback, confirming the popular theory that price follows fundamentals and specifically hash rate.

Graph of Bitcoin’s average hash rate every 7 days out of 60 days. Source: Blockchain

Move, Lina seiche, CEO of Bitcoin Media Outlet, BTC Times, drew attention to the overall strength of the hash rate.

“Bitcoin’s hash rate has increased 18% since the third halving, 9,300% since the second halving, and 554,000,0000% since the first halving,” he wrote this week.

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