Bitcoin is currently trading at $25,950, marking a modest increase of just 0.10% on Tuesday. This stagnation below the $26,000 level is taking place in a context of significant challenges in the Bitcoin mining sectorwhere miners are grappling with increasing levels of difficulty and hash rates that have reached all-time highs.
In addition, trading activity seems to be decreasing, Bitcoin transaction volume falling to lowest level in over four years. In addition to this dynamic, the cryptocurrency market, and Bitcoin in particular, is preparing for potentially large fluctuations, influenced by a set of crucial economic data which will be unveiled next week.
Bitcoin mining is getting harder
On August 17, the bitcoin network hash rate has reached a record level of over 414 (PE/s), accompanied by an unprecedented level of difficulty. Even though the price of Bitcoin has remained stable around $26,000, institutional interest in mining has spurred the expansion of the network. Nevertheless, mining operations struggle to maintain profitability due to increased operating costs.
August 27, the cost of mining one BTC was $45,877, while its spot price was $26,089, resulting in a loss of $19,588 for each BTC mined. This has a negative impact on listed mining companies, causing major declines. It should also be noted that BlackRock Fund Advisors is a major shareholder in several underperforming mining companies.
Bitcoin trading hits 4-year low in volume
A recent CNBC report reveals that Bitcoin trading volume hits lowest point in over four years. The amount of Bitcoin traded on all exchanges has fallen to levels last seen in 2019, with an average of 129,307 BTC traded.
This represents a significant decrease from the March high of 3.5 million BTC, down about 94%. The decline in trading volume is due to the decline in investor participation. THE cryptocurrency market has had a lackluster summer, marked by regulatory pressures and a backdrop of a banking crisisresulting in reduced activity.
However, long-term investors seem unaffected by recent market weakness and are waiting for catalytic events, such as decisions on spot Bitcoin ETFs.
Upcoming Economic Data Could Affect Bitcoin Prices
Bitcoin market consolidation continues, but volatility may increase over the coming week. The US market expects important macroeconomic dataas consumer confidence, consumer price index and non-farm employment figures.
In addition, there is significant interest in possible SEC rulings regarding spot Bitcoin ETFs for several organizations. Given recent market dynamics and historical SEC delays, the impact of these factors may be short-lived.
Bitcoin Price Prediction
Analyzing the technical aspects of Bitcoin over a daily time frame reveals that Bitcoin is currently consolidating in a narrow trading range. This fork has a lower limit $25,400 and an upper resistance near $26,800which appears to be a turning point for BTC.
When evaluating major indicators such as the Moving Average (MA) and Moving Average Convergence Divergence (MACD) in conjunction with the Relative Strength Index (RSI), both suggest continued bearish momentum. There 50-day exponential moving average (EMA) further reinforces this sentimentpositioned around the $27,285 level, suggesting that the bearish momentum remains robust.
If Bitcoin breaks through the $25,400 support level on the downside, it is possible that it will fall towards $23,900 or even as high as $21,900. Conversely, a A bullish break above $26,800 could pave the way for Bitcoin to approach the $28,600 level. It is therefore essential to closely monitor the range specified to determine the direction taken by the market.
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