Few factors affect Bitcoin price apart from simple speculative motivation and supply – demand. However, the energy costs associated with Bitcoin mining seem to have a strong impact on where and when asset assets bottom out.
The leading cryptocurrency by market capitalization has bottomed out when Bitcoin price is lower than production cost in 2018 and the end of 2019. Recently, Bitcoin has just reached the third “bottom of the miner”. Is it possible that the “third glamorous situation” will eventually bring Bitcoin into the new bull market?
Bitcoin hits “bottom of miner”
Bitcoin is a unique asset unlike any other that has existed before. But because Bitcoin and other crypto assets are not widely accepted and there are use cases that allow users to manage their own money so pricing is currently speculative.
Some analysts have tried to find out the long-term value of Bitcoin by research Programmable digital scarcity of assets.
However, the metric seems to be very important in setting the base value for the first cryptocurrency cost manufacturing.
BTC is rewarded to miners for powering the underlying protocol and validating each block added to the blockchain.
But it takes a lot of energy to validate each block, so miners must be acutely aware of production costs and the level of approximation of the price of each BTC.
The “bottom of the miner” is the break-even price, in which the price of Bitcoin reaches the level equivalent to the cost of production per BTC.
Is this the last buy signal before the bull run?
When losing, miners have little incentive to sell Bitcoin. Slower supply from the largest sellers in the market was dumped, resulting in demand exceeding supply and asset value rising again.
Bitcoin plunged to the miner's bottom in December 2018 when it established a bear market bottom. After that, the price traded below $ 6,500 in December 2019 and again moved below this basic production cost.
Cryptocurrencies are returning to this region once again and may have found another local bottom. The latest bottom works in the form of a higher bottom, suggesting Bitcoin is on the way to a new uptrend.
With halving in May, production costs are expected to double as miner rewards are reduced to half.
Miner is likely to stop selling and once again push the market upward.
Bitcoin is expecting short-term growth when the bulls return to the main technical level
At the time of writing, Bitcoin is trading down 0.58% at its current price of $ 7,889, marking a noticeable increase from the daily low of $ 7,600 during yesterday's intense sell-off.
It appears that the strong support the cryptocurrency has established at $ 7,700 is strong enough to prevent further declines. The price subsequently increased above $ 8,000 thanks to this level of vigorous security.
Another important factor to consider is that Bitcoin has been able to regain the 4-hour EMA, which is a bullish sign that could allow higher gains in the coming hours.
– Big Cheds (@BigCheds) March 10, 2020
“BTC has regained its 4-hour EMA”
BTC may enter a new era of decline
An interesting trend to keep in mind is the Bitcoin price action during the period after the 2017 bull run – one of the strongest declines seen in its relatively short history.
Analyst and trader MoonOverlord has pointed out a striking change in the structure of the BTC macro market and cites the chart that sheds light on the difference between recent price action and after parabolic cycles over the years.
Feels like were in a new $ btc era, price action above $ 9- $ 10k being stifled and sold heavy, all wicks to the upside
Historically dips, and a majority of wicks were to the downside, feels that like has flipped, especially in this newest structure pic.twitter.com/aA7gVHyoDy
– moon (@MoonOverlord) March 10, 2020
“Feeling like the new BTC era, price action above $ 9-10k is constrained and heavily sold, all wicks are pointing up. “The dramatic price cuts in history and the majority of wicks dropped, it felt like it was flipped over, especially in this latest structure.”
The size of the Bitcoin market may be a factor that changes macro price action, but it is important to note that continuing this price action may cause a noticeable sell-off in the coming months.
You can see the price of Bitcoin here.
Disclaimer: This is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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