Bitcoin: $27,137.00(-3.6%) 
Ethereum: $1,712.08(-3.92%) 
Tether: $1.00(-0.19%) 
BNB: $308.72(-6.33%) 
USD Coin: $1.00(-0.21%) 
XRP: $0.4789(5.6%) 
Cardano: $0.3446(-3.75%) 
Dogecoin: $0.0731(-2.38%) 
Lido Staked Ether: $1,661.79(-6.47%) 
Polygon: $1.04(-6.3%) Bitcoin: $27,137.00(-3.6%) Ethereum: $1,712.08(-3.92%) Tether: $1.00(-0.19%) BNB: $308.72(-6.33%) USD Coin: $1.00(-0.21%) XRP: $0.4789(5.6%) Cardano: $0.3446(-3.75%) Dogecoin: $0.0731(-2.38%) Lido Staked Ether: $1,661.79(-6.47%) Polygon: $1.04(-6.3%) Bitcoin defends $20K as its Hashrate approaches All Time High
August 31, 2022
The ongoing Bitcoin bear market has led to the price currently hovering around $20k after the recent fall from $25k when it broke below its ascending parallel channel. Despite the price being over 70% down from the ATH of $69k set in November last year, Bitcoin's hash rate has been rising steadily and is close to reaching its previous all time high of 227 petahashes per second.
The network hashrate has grown by over 10% in the last two weeks after the dip earlier in the summer as a significant percentage of Bitcoin miners had temporarily paused operation in response to peak power demand due to the extreme summer heat. Hence the hashrate recovery seems to be a result of the summer season coming to an end, boosted by the higher efficiency Bitmain S19 XP's launching recently.
The rangebound movement of Bitcoin corelates with U.S. stocks with the S&P 500 recovering by 0.15% and Nasdaq by 0.55% in the last few hours. On the other hand Ethereum jumped from $1420 to reach a high of $1622 before pulling back in the last couple of days, potentially due to news related to the upcoming Merge event.
The technical analysis shows Bitcoin rejecting heavily from the 100-day moving average at $24500 followed by a massive correction of 20% as it continues to find support and bounce from last cycle's all time high region. The 4-hour RSI is forming a bullish divergence which is highly unlikely to play out considering that DXY is still setting new all time highs with analysts predicting more upside in upcoming weeks.
The last week's FOMC meeting showed that the Fed had abandoned the idea of a "soft landing" and instead were planning to keep growth in check to "grind inflation down". Crypto analyst Michael van de Poppe took to twitter to explain that it was essential to have stable Dollar or a weak Dollar before we can expect any upwards movement in risk-on assets including crypto. He also pointed out the potential bearish divergence being formed by DXY on the weekly chart suggesting that the top was close.
The on-chain analysis also showed Bitcoin dipping below its realized price while the MVRV ratio dropped below 1 again after the fed meeting. However caution is adviced before investing in Bitcoin at this time as even tho the market value to realized value has falled below 1 it has not even come close to reaching the lows seen in previous bear market cycles, suggesting that Bitcoin has not found a proper market bottom yet and the capitulation phase could take several more months.
The network hashrate has grown by over 10% in the last two weeks after the dip earlier in the summer as a significant percentage of Bitcoin miners had temporarily paused operation in response to peak power demand due to the extreme summer heat. Hence the hashrate recovery seems to be a result of the summer season coming to an end, boosted by the higher efficiency Bitmain S19 XP's launching recently.
The rangebound movement of Bitcoin corelates with U.S. stocks with the S&P 500 recovering by 0.15% and Nasdaq by 0.55% in the last few hours. On the other hand Ethereum jumped from $1420 to reach a high of $1622 before pulling back in the last couple of days, potentially due to news related to the upcoming Merge event.
The technical analysis shows Bitcoin rejecting heavily from the 100-day moving average at $24500 followed by a massive correction of 20% as it continues to find support and bounce from last cycle's all time high region. The 4-hour RSI is forming a bullish divergence which is highly unlikely to play out considering that DXY is still setting new all time highs with analysts predicting more upside in upcoming weeks.
The last week's FOMC meeting showed that the Fed had abandoned the idea of a "soft landing" and instead were planning to keep growth in check to "grind inflation down". Crypto analyst Michael van de Poppe took to twitter to explain that it was essential to have stable Dollar or a weak Dollar before we can expect any upwards movement in risk-on assets including crypto. He also pointed out the potential bearish divergence being formed by DXY on the weekly chart suggesting that the top was close.
For risk-on assets, including #Bitcoin, it's essential to have a stable Dollar or a weak Dollar, as upwards pressure can be expected on the markets.
— Michaël van de Poppe (@CryptoMichNL) August 31, 2022
The coming month is going to be important for the $DXY.
And this potential bearish divergence could be the first signal. pic.twitter.com/rnujlDZcQA
The on-chain analysis also showed Bitcoin dipping below its realized price while the MVRV ratio dropped below 1 again after the fed meeting. However caution is adviced before investing in Bitcoin at this time as even tho the market value to realized value has falled below 1 it has not even come close to reaching the lows seen in previous bear market cycles, suggesting that Bitcoin has not found a proper market bottom yet and the capitulation phase could take several more months.
