Whether Bitcoin is heading up or crashing face-first in the market, the community is always curious about its short-term future. This was the case as after having dropped down to approx. $32,000 on the price charts, Bitcoin managed to recover a position near $36,000, at press time.
While turbulence is the word of the day for Bitcoin’s price action, one of its most important fundamentals pictured an extremely healthy outlook.
Bitcoin mining difficulty at All-time high
Source: blockchain.com
According to blockchain.com, the mining difficulty for Bitcoin is currently at an all-time high of 20.607 TH/s. The 6th of November marked the last all-time high at 19.99 TH/s. Mining difficulty is in direct correlation with network health and a high during a market drop is indicative of a sustainable market.
Additionally, the network hashrate was also near its all-time high range, a finding which suggested that miners were having only minor problems with the cryptocurrency’s price dropping over the last few trading sessions.
Source: CryptoQuant
On the question of Bitcoin miners, total small miner outflows over the past 24 hours were less than 10 BTCs, while the total miner outflows also noted a very nominal number. While the chart may change over time if the market falls again, what seemed evident was that miners were far from panicking, at press time.
With miners, it might all come down to their profitability at a certain price point. During the 3rd Bitcoin halving, data suggested that for miners to maintain cost-effective mining activity, Bitcoin needed to remain above $10,000.
However, the last time Bitcoin was below $10k was way back in August-September 2020.
Will we see an immediate recovery?
Source: Glassnode
At press time, BTC had recovered somewhat to consolidate right above $36,000. While that is good news, the scenario from here on will be based on market dynamics with respect to retail and institutional investors. In fact, the possibility of a minor weak hands shake-off looked real, something that may lead to further corrections on the charts.
However, on the other hand, data seemed to suggest that Bitcoin whales have continued to accumulate more BTC as the number of addresses with 1000+ BTC rose.
The ongoing week could be yet another turbulent period for Bitcoin, but as of now, the momentum is still with the bulls.
Source: Coinstats
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