The price of Bitcoin “fell out” of the range in which the cryptocurrency was traded for almost a whole month. In general, on the first wave of the drain, BTC dropped down to 29 thousand dollars. The new market collapse is caused by several factors at once, one of which is the state of the US economy. On top of that, bitcoin mining difficulty will soon fall to a record high since the beginning of this year. Let’s take a closer look at each of the above factors.
Yesterday, Bitcoin managed to sink from 30.2 to 29 thousand dollars. The change in the rate was sharp, and it significantly affected the state of cryptocurrency investors. According to Glassnode, this price action made 1.1 million bitcoins unprofitable, which translates to 5.9 percent of all coins in circulation.
The impact of the fall in the Bitcoin exchange rate on the number of profitable coins
At the same time, holders of 70.4 percent of all bitcoins in circulation can sell BTC in plus.
What will happen to the credit rate in the US
On July 26, a regular meeting of the Federal Open Market Committee of the US Federal Reserve (FOMC) will take place. During this event, a final decision will be made on changing the current base lending rate.
Bitcoin exchange rate on a 4-hour chart
A few months ago, markets were counting on the Fed to pause in a long series of increases in the rate and would no longer resort to this procedure until the end of the year.
In June, the FOMC meeting took place, and the Fed really left the rate unchanged. However, the head of the Fed, Jerome Powell, said that the goal of curbing inflation was not achieved in the US economy, therefore the rate will be raised before the end of the year twice more.
The upcoming meeting of the Committee was perceived by the markets with a very pessimistic mood. The FedWatch Tool estimates the probability of another rate hike at 99.8 percent. Accordingly, industry participants have little doubt that tomorrow we will see another increase in the base interest rate.
FedWatch Tool Data
Напомним, базовая процентная ставка определяет стоимость денег, то есть кредитов для коммерческих банков от центрального банка. Чем выше процентная ставка, тем дороже обходятся займы — а это напрямую сказывается на желании инвесторов и предпринимателей рисковать. В целом увеличение процентной ставки проводится для замедления темпов роста экономики, снижения инфляции и уменьшения денег в обращении. Соответственно, ситуация в мировой экономике не будет улучшаться до тех пор, пока ФРС не начнёт снижать ставку. Однако как ранее заявлял Джером Пауэлл, для этого нужно снизить инфляцию до зоны 2 процентов.
The tension of the current week was summarized by a Twitter user under the pseudonym The Kobeissi Letter. Here is the relevant retort.
This week will be extremely eventful for the markets. About 20 percent of S&P 500 companies are expected to publish reports, the Fed meeting and inflation data to top it all off. After a few weeks of low volatility, the situation will become much more interesting. This is a great week for traders.
Weekly calendar of important economic events
The same can hardly be said about miners – a downtrend is beginning to be seen in the main indicators of their activity.
Is it profitable to mine Bitcoin?
According to sources from Cointelegraph, mining difficulty should decrease by about 4 percent, with a recalculation of the indicator taking place on July 26. The decrease in difficulty is a direct consequence of the drop in hashrate, which means that a certain part of the miners were forced to turn off their equipment due to problems with profitability.
Prediction for the next bitcoin mining difficulty change
An analysis of the behavior of miners based on the Hash Ribbons metric was carried out by the founder of the investment company Capriole Investments, Charles Edwards. In general, this indicator shows the dynamics of the hashrate of miners and a change in the trend in it. The day before, the indicator showed an “excessively large” increase in hash rate, which was also emphasized by Edwards in the following quote.
There is a capitulation of miners on Hash Ribbons. That is, a slowdown in the growth of the Bitcoin hashrate after an incredible unsustainable growth of 50 percent in 2023.
Hash Ribbons indicator and its relationship with the Bitcoin price
In general, the current situation is not yet too critical for the bulls, while the miners remain in uncertainty against the backdrop of another BTC drain. Accordingly, they recently made the right decision by fixing their risks by selling a record number of mined coins on exchanges.
The owner of one old Bitcoin wallet also decided to fix his profit. The day before, the address, which had remained inactive on the cryptocurrency network for more than eleven years, made a transaction. He transferred all his coins in the amount of 1037 BTC, which is the equivalent of $31 million.
The growth of the balance on the wallet in dollars over the years
The transfer was made at a Bitcoin price of $29,956 at block 799701, that is, at noon on July 22.
The aforementioned coins first hit the wallet on April 11, 2012, when the price of Bitcoin fluctuated within just $5. At that time, the value of the wallet was estimated at $5,108. Respectively, for 11 years, the profit of the anonymous owner of the wallet was almost 606,800 percent. Well, at the time of the historical maximum of the BTC price in November 2021, the value of the coins on the wallet reached 71.6 million dollars.
The recipient of a large transaction was a Bitcoin address starting with “bc1qt180…”. At the same time, he himself was created relatively recently.
The recipient of a large transaction. The new address also sent coins to another wallet
Large transactions in the Bitcoin network have recently been carried out by the US government. For example, on July 12, government authorities transferred about 10,000 BTC for a total of almost $300 million. These coins were confiscated from the closed darknet platform Silk Road. It is not yet known whether the transfers were sent to exchanges for sale, or whether the coins are still in storage with the US Department of Justice.
Эта неделя обещает быть богатой на события. Главным из них окажется решение по базовой процентной ставке вечером в среду. Однако здесь также нужно обращать внимания на комментарии Джерома Пауэлла, в словах которого по традиции найдутся намёки на дальнейшие действия ФРС. И если банкиры после этого действительно решат повысить ставку лишь один раз до конца года, условия для как минимум краткосрочного роста рынка наверняка сохранятся.
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