Bitcoin (BTC) finally broke above $17,000 a week ago for the first time since the FTX crash. Despite some dips, the price held up and peaked around $17,400 on Monday.
This morning, however, bitcoin is losing traction at USD 17,000 and made a rapid plunge to USD 16,750. At the time of writing, the BTC price stands at $16,800 on Binance and $16,050 on Bitvavo.
This puts the bitcoin price down 1.4% today. The trading volume increased by 14% in the past 24 hours. The total market capitalization is $323 billion and the dominance is 38.5%. The Fear & Greed Index comes out at 29 (Fear).
Plenty of indecision for #Bitcoin about the past 6 days.
— Caleb Franzen (@CalebFranzen) December 6, 2022
Bitcoin follows red stock markets
Bitcoin has held up remarkably stronger than stock markets such as the S&P 500 in recent days. Bitcoin has a very high correlation with this this year. However, bitcoin now seems to follow these markets, which mainly closed in the red yesterday. It is a sign that the macroeconomic situation is still leading.
— Investing.com (@Investingcom) December 6, 2022
Bitcoin mining difficulty drops sharply
Yesterday, the so-called bitcoin mining difficulty fell by no less than 7.32%. That is the worst drop since the mining ban in China at the beginning of summer 2021, when the mining difficulty even dropped by almost 28%.
Nevertheless, this drop is somewhat welcome this time. Due to the high hash rate and low price, miners have had a very tough time lately. Miners had to sell their stocks and several companies had already capitulated. This difficulty reduction ensures that the pressure decreases slightly.
The #Bitcoin protocol has just decreased mining difficulty by -7.3%, the largest downwards adjustment since July 2021.
Given depressed coin prices, rising energy costs, and debt burdens, the mining industry is under extreme stress.
Live Dashboard: https://t.co/64jyX7mRzj pic.twitter.com/USBtvhQtZt
— glassnode (@glassnode) December 6, 2022
Bitcoin exodus since FTX crash
Last month was marked by the FTX crash, which led to the largest bitcoin outflow ever. Analyst Will Clemente reports that about 200,000 BTC worth about $3.4 billion was pulled from crypto exchanges last month.
However, this time it was not so much because of confidence in BTC, but rather a lack of confidence in centralized exchanges due to the FTX fiasco.
Over the last 30 days 200,000 BTC worth ~$3.4 billion have been moved off exchanges.
The great exodus. pic.twitter.com/A6smuSEAHE
— Will Clemente (@WClementeIII) December 6, 2022
Bitcoin bottom near?
Meanwhile, the market is speculating about the possible bottom of the bitcoin price. Dutch analyst Maartunn reports that bitcoin is heading into its longest bear market ever. This has been going on longer than the one from 2017.
#Bitcoin is heading up for the longest bearmarket in history (or we have already bottomed) 😉
2011 (⚪): 159 days
2013 (🟠): 411 days
2017 (🟢): 364 days
2021 (🟣): 392 days and counting pic.twitter.com/MDIAqnYWDw
— Maartunn (@JA_Maartun) December 6, 2022
Analyst IT Tech also wonders whether the price is now close to the bottom of this cycle. The number of unspent transaction outputs (UTXO) that are more than 6 months old has now reached the same peak as during previous sell offs.
That could mean a trend reversal is just around the corner, but as the analyst says, “past performance is no guarantee of future results.”
1🧵#Bitcoin Is the bottom of the cycle near?
UTXOs over 6 months old (they are Long Term Holders because they keep $BTC about 155 days) take almost 90% of the realized cap.
In the previous cycles sell-off: Sep 15, April 19 this indicator reached over 70% …👇 pic.twitter.com/kjHRj6KFXd
— IT Tech (@IT_Tech_PL) December 5, 2022
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