- Bitcoin returns to challenge $48,000
- Favorable headwinds look set to add to Bitcoin’s strength.
- a falling dollar will be a boon for hedge assets
BTC is fast approaching its second attack on pivotal resistance this week, and bulls dominate the proceedings in the market. It was a mixed weekend that saw both faces of the coin- a run on $48,000 and a major rejection at that level; Bitcoin is already back, having made up all of its losses.
The conditions broadly favor the bulls, and it is just a matter of time before the next move reshapes the BTC/USD spot market.
A rags-to-riches story
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Saturday saw the BTC/USD jumping above $47000, and it is a zone that borders a huge resistance wall that remains in place. Subsequently, Bitcoin dropped to local lows of $45,500 before recovering through Sunday, ultimately bringing Bitcoin back to where it had begun the weekend’s action, and Monday’s picture provides a firm sense of déja-vù for traders.
Prominent crypto expert Michaël van de Poppe had cautioned before the latest run-up was confirmed. He said that Bitcoin needs to regain $46.5K, and If not, $44K next.
Investors are sticking at $48,000, and a glance at buying and sell levels on major exchange Binance shows the extent of the resistance, with support at $45,000 now also substantial.
Meanwhile, trader and analyst Rekt Capital pointed to the ascending triangle structure for BTC/USD, with Sunday providing a test of its upper boundary but not a breakout. He tweeted on Monday that BTC has achieved a new Lower High on this most recent successful retest attempt.
Hash rate, difficulty at its peak
Bitcoin fundamentals are still very strong and are surging, climbing toward all-time highs. The automated readjustment on Friday saw difficulty increase by 7.3%, completing its best performance since Bitcoin’s May price sell-off
After being forced out of China, mining power returns to Bitcoin while existing operations are adding to their capabilities. The result is a bigger Bitcoin mining hash rate and more competition for the Bitcoin block subsidy, a process that, in turn, leads to difficulty rising to keep the network in equilibrium. The process also augments network security and underscores miners’ long-term commitment to Bitcoin — investment in return for profits.
At present, the hash rate stood at 113 exahashes per second (EH/s) on Monday, now firmly above the 100 EH/s mark and 30 EH/s above the post-May lows. Just before the crackdown in China, the hash rate was 168 EH/s, according to monitoring resource MiningPoolStats.
Dollar celebrates 50 years.
Bitcoin adds to its strength from the wider macro environment this week after a tough end to the week for the United States dollar. It is 50 years this weekend when the U.S. ended the dollar’s gold convertibility. However, a weak Dollar cannot indicate easy returns for the BTC, but it can be considered an indicator of the state of the crypto market.
When writing, the U.S. dollar currency index (DXY) stood at 92.6, down from over 93 last week.
Justin d’Anethan, head of exchange sales at Nasdaq-listed crypto firm EQONEX in a market survey, said that a falling dollar would be a boon for hedge assets such as gold as well. Justin wrote on Monday one can see the falling dollar supporting risk assets and also gold, trying to make a comeback; he wrote Monday
Justin added that the bullish sentiments could be felt in the crypto space, and the investors are a lot richer now than they were last week or the week before that.