Bitcoin (BTC) in a tight fight between bulls and bears and the net is now interacting, data shows.
Trackers reveal That this week, Bitcoin difficulty crossed an 18-week green streak to post its first decline since July.
Difficulty adjusts to 20% drop in bitcoin price
Amid cyclical short-term price movements, there is still concern that Bitcoin has not finished recovering from all-time highs at $69,000.
After that surprised analysts and even unacceptable One price model for life, BTC/USD over the past month looks like uncharted territory – despite almost doubling the year so far.
“With Bitcoin now down more than 20% from its all-time high, the headlines in traditional media have announced that Bitcoin has entered a bear market,” summarized cross-chain analytics firm Glassnode in its recent weekly newsletter,The week on the series. “
“However, it may surprise some readers that the current market correction is actually the least severe in 2021. Some might even say business as usual for the Bitcoin HODLer.”
However, network fundamentals are now taking the recent dip into account. On Sunday, the difficulty slipped 1.5% – after rising for nine straight periods. The next adjustment is currently set to produce a further decline of about 2%.
Long-term holders’ spending raises ‘uncertainty’
Scanning the landscape, Glassnode did not rule out further price drops.
A combination of long-term selling, massive open interest in derivatives markets and other phenomena could lead to a continuation of the downtrend to new local lows.
“Open leverage in options and futures is at or near ATHs, which is cause for some concern about the increased likelihood of ‘flow’. I conclude that funding rates show only a slightly positive bias, making both long and short stress scenarios acceptable.”
Regarding the behavior of LTH, he added:
“Long-term holders have distributed 5.8% of the accumulated supply since March and there is some uncertainty based on their spending patterns.”
While discussing open interest, analyst Willy Wu noted that in a post-ETF environment, activity may only remain higher and not necessarily indicate turbulence on the horizon.
“IMO you don’t necessarily need a scan,” said chirp.
“It could be a sign of time with, absorbing cash and carrying futures ETFs after trading.”
BTC/USD has shaved the $56,000 circle at the time of writing on Thursday after spending the past 24 hours repeating sprints to $59,000 and subsequent rejections.