Another Day of Bitcoin Resilience
The end of the month concludes with the NASDAQ sliding by 2.45% while Twitter took a massive blow of -21.11%. Gold traded sideways, ending the day with +0.58%. The trophy goes to bitcoin, once again, with a slight increase of 1% and currently trading at $13,550. This didn’t leave the crypto market unharmed though, as altcoins ended the week in a slump.
On-Chain Data Signals Caution
It wasn’t so long ago that we were reading about on-chain metrics signaling strong network usage with the hash rate and difficulty levels reaching new highs. Now it seems that we made a complete 180° as on-chain metrics are showing us low traffic. This absence of activity hasn’t been seen since the March sell-off.
Let’s start with the hash rate. As stated before, the lowest point of the year was in March with the hash rate being 76 million TH/s. After a strong recovery, September 25th marked a new all-time-high of 161 million TH/s.
Now it’s a month later and we find ourselves on a reversal trend. On October 27th the hash rate dropped to 95 million TH/s. This drop could have been caused by the seasonal migration of Bitcoin miners in China but there’s no way to be certain. Although not 100% correlated, the hash rate does give us a hint to were price will go next.
November 3rd will be an important day for bitcoin, apart from the rising tension of the election. On that same Tuesday, the difficulty of bitcoin mining will readjust and it’s estimated to go down by 10.4%. This downward move will be the biggest one since late March. The lowering of difficulty will result in easier entry to mining and will hopefully lead to a rebound. Price action may be influenced in line with miner behavior, while current high fees should also be reduced as mining become more profitable. These are currently at their most expensive in USD terms since early 2018.
