Why does BTC Still Provide Calm for Investors? | Empirex Capital

Why does BTC Still Provide Calm for Investors?

For all the nerve racking price action, meanwhile, nothing provides a bullish counterpoint to the current Bitcoin narrative than its network fundamentals.

Even after its dip to $35,000, Bitcoin is more attractive than ever for miners, and its network security is, therefore, also more solid than ever before.

As Cointelegraph reported, both the hash rate and difficulty have staged a miraculous recovery in recent weeks, reclaiming all-time highs after a miner washout caused its own brief price crash.

The weekend proved to be no different, with the weekly average hash rate topping 180 exchanges per second for the first time.

The difficulty is still on track to increase by over 10% at the next automated readjustment in 11 days’ time. The previous readjustment on Friday, at 21.5%, was the largest positive shift since June 2014.

“Bitcoin’s mining difficulty hitting an all-time high just after Tesla's announcement is a chef’s kiss,” Alex Thorn, head of firmwide research at crypto merchant bank Galaxy Digital, said last week.

Dollar bounces at support

Taking a break for crypto-specific triggers, the wider macro picture may yet provide some inspiration for price trajectory.

After plunging late last week, the strength of the United States dollar is returning. The U.S. dollar currency index (DXY) is bouncing off familiar support — surges in its strength tend to provide teething problems for BTC/USD.

At the same time, stocks are bullish in China but performing averagely in Europe and the United States. The coronavirus, with localized peaks in some jurisdictions but fewer cases in others, joins the melting pot.

Bitcoin still beats its last bull market

Among the industry’s best-known names, there is no hint of bearishness — all that remains to do is analyze the nature of the current retracement and compare it to years past.

This week, stock-to-flow creator PlanB notes that for all the Musk drama, Bitcoin is still performing better than during its 2017 run to $20,000. This despite the $42,000 dip officially being Bitcoin’s biggest this bull cycle and since the cross-asset crash of March 2020.

“Today feels like the 2017 bull market (esp. during the fork war),” he tweeted on Monday, invoking memories of the birth of Bitcoin Cash (BCH).

Created on 28th May 2021

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