Bitcoin (BTC) is facing the risk of breaking down below $61,000, as it tested familiar trendlines for support, causing a decline in its price. Despite the low-timeframe volatility affecting liquidity, BTC lacked significant upward momentum. Traders were closely monitoring the 100-day simple moving average (SMA) and the short-term holder realized price (STH-RP), which are considered crucial support levels in a bull market. Last week, BTC briefly dipped to $56,500 but did not violate these levels for an extended period.
At the time of writing, the 100-day SMA and STH-RP were at $61,200 and $60,100, respectively. Skew, a popular trader, highlighted the significance of the 100-day SMA and the monthly open at $60,600 on higher time frames. He emphasized the importance of seeing evidence of sellers being absorbed to confirm strong demand.
Bitcoin’s price movements also had an impact on the network’s fundamentals. The mining difficulty, a measure of the computational effort required to mine new BTC, was set to decrease by 5.5% at the time of writing. This adjustment was the largest downward correction since the end of the 2022 bear market when BTC was trading below $20,000. Currently, the difficulty is at an all-time high of 83.23 trillion.
Analysts observed that the hashrate, another important metric in mining, was already declining. However, what mattered for miners was the difficulty level, which determines how much Bitcoin they can mine per unit of computational power. Difficulty adjustments occur approximately every 14 days, and assuming a -7% adjustment, the difficulty hashrate would be around 585 EH/s. Despite the drop in hashrate, it remained above earlier predictions, indicating ongoing mining activity.