Over the past month and beyond, Bitcoin (BTC) hashrate has been declining as miners struggled to continue operations amid the sharp correction. The Bitcoin network is likely to see its biggest adjustment in mining difficulty in over a year.
On-chain data provider Glassnode reports: “That #Bitcoin Protocol just cut mining difficulty by -7.3%, the largest downward adjustment since July 2021. Amid low coin prices, rising energy costs and debt burdens, the mining industry is under extreme stress.”
Courtesy Glassnode
Additionally, has-ribbon indicators are suggesting that another major correction may be on the horizon for Bitcoin. In its report, Glassnode mentions:
“This difficulty adjustment is in response to falling #Bitcoin hash rate. This has caused another reversal in hash bands as the 30DMA dips below the 60DMA. The last hash ribbon inversion took place in early June 2022.
Courtesy Glassnode
As we can see from the image above, Bitcoin has faced a significant price correction the last two times the hash band has been flipped. However, this was not always the case.
Bitcoin capital inflows have been flushed out
Bitcoin staged a brief rally last week on Wednesday amid news that the Fed would slow impending rate hikes. As a result, BTC price surged as high as $17,500. Since then, however, it has declined and has once again approached the $17,000 mark.
On the upside, $16,000 is a strong support. Let’s take a look at Bitcoin’s realized cap, which shows the net sum of capital inflows and outflows. The Glassnode report notes:
In the wake of one of the largest deleveraging events in digital asset history, the #Bitcoin The realized cap has dropped so that all capital inflows since May 2021 have now been flushed out, suggesting a capital reset is underway.
Courtesy Glassnode
On the other hand, bitcoin microaddresses have also shown extremely unusual behavior. After showing signs of accumulation since the news of last month’s FTX implosion, the number of addresses has declined rapidly over the past two weeks.
Bhushan is a FinTech enthusiast and has a keen sense of understanding the financial markets. His interest in economics and finance draws his attention to the emerging blockchain technology and cryptocurrency markets. He is constantly in a learning process and motivates himself by passing on the knowledge he has acquired. In his spare time he reads thriller fiction novels and sometimes explores his cooking skills.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication assumes no responsibility for your personal financial loss.
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