It seems like stimulus isn’t coming until the election and the market does not like it. On top of this, it seems that we continue to see an uptick with European cases and the US is no better at containment. Uncertainty hits the market hard as it’s dictated by news rather than actual intrinsic value.
Bitcoin is showing signs of resilience as it traded sideways as equities took a dip. Gold also seems to be holding off which may imply the start of a divergence between safe haven assets and equities.
Painting The Picture For 2021
This week, bitcoin secured its second-highest weekly close since January 2018. Bitcoin has beaten out the long-term weekly resistance at $11,900 while holding these high levels. In recent history brief spurts above $12k all ended in rejection and a retreat to lower levels on weekly timeframes. Analysts hope that this time is different and an increase in whale activity can create a fundamental support.BTC/USD weekly chart. Source: TradingView
Short-Term Pullback In Sight
After working overtime bitcoin deserves a break. With on-chain metrics we can conclude that the network is experiencing a cooling period. We hope that it’s a reset for new highs but there’s a chance that it may be a burn out.
According to data from BTC.com and Blockchain, difficulty and hash rate are or will be trending down in in the near future. For those who don’t know, difficulty is a measurement of miner activity and we see that it may decline by 1.6% at the next readjustment period which is in 6 days. The weekly average hash rate has been sloping downwards from its highs since October 18th. As of October 26th, the average is 133 exahashes per second (EH/s) with the record being 146 (EH/s).Bitcoin 7-day average hash rate 1-month chart. Source: Blockchain
With the anticipation of a pullback what can we expect? Well what we can hope to see is a support at $12.5k. Why? Because $12.5k is near the 10-day moving average on the ...