Is $40,000 now barrier for Bitcoin (BTC) as the week begins?
The world’s largest cryptocurrency has now ended its fourth consecutive red weekly candle, which hasn’t happened since June 2020.
As investors grow increasingly concerned about the macroeconomic outlook, there appears to be little to cheer bulls as the week begins – and Bitcoin is still dropping off.
Price goals now center on retests of liquidity levels further toward $30,000, following $4,000 in losses in the last four days alone.
It’s not all doom and gloom, though: long-term investors and crucial participants like miners are becoming increasingly optimistic about Bitcoin as an investment.
The French election, which incumbent Emmanuel Macron won, is the most important foreign event for risk assets this week.
Macron’s second term is likely to lift French stocks in particular on April 25’s open, as well as the troubled euro, bringing a sigh of relief to market participants worried about a surprise victory by far-right competitor Marine Le Pen.
Despite facing a strong combination of inflation and falling bond markets, the European Central Bank (ECB) has yet to take substantial moves to hike interest rates or decrease its near $10 trillion balance sheet, much like the United States.
Bitcoin was unaffected by Macron’s victory, and risk assets are already bracing for an Asian sell-off on April 25 as China’s COVID-19 shakes investor confidence.
Hong Kong’s Hang Seng index is down 3.5 percent on the day, while the Shanghai Composite is down 4.2 percent.
Given how tightly crypto is now tied to stock market movements, a repeat performance by Europe and the US would provide unambiguous directional clues.
“The worry is the current policy support that the government has already put in place may not be effective because of the Covid policies as activities are subdued,” Jenny Zeng, co-head of Asia Pacific fixed income at AllianceBernstein, told Bloomberg.
When it comes to investment, a study at Bitcoin’s network fundamentals reveals that miners are anything but gloomy.
Bitcoin’s network hash rate and difficulty are both set to hit new all-time highs this week, a common theme this year but nevertheless impressive given that price is trending in the opposite way.
Depending on price performance, difficulties should adjust up by 2.9 percent in two days, hitting a new high of 29.32 trillion.
Difficulty joins hash rate — an indicator of the processing power committed to the blockchain — which is already at its highest level ever, underscoring the rivalry to engage in mining.
Estimates differ depending on the source, but raw data from MiningPoolStats highlights the “up only” trend in hash rate, which some claim is a significant catalyst for following bullish price performance.
The tendency of increasing the hash rate isn’t new; it’s been predicted for a long time as investment grows.
As previously revealed by Cointelegraph, publicly-traded corporations were responsible for 20% of Bitcoin mining as of early April.
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