- Bitcoin hash rate back to pre-May crash levels, on-chain analytics firm Glassnode reports.
- Bitcoin has regained confidence of investors, leading weekly funds inflows.
- Price of BTC broke above $50k
NEW DELHI (CoinChapter.com) — Bitcoin rallied strongly last week, breaking above consolidation range near the low $40k levels, before nearly breaching $50k on Oct 3. Furthermore, data from on-chain analytics firm Glassnode reveals Bitcoin’s hash rate has nearly recovered from its 50% crash in May following China’s mining crackdown.
In detail, hash rate measures the computational power used to mine and process transactions on a Proof-of-Work blockchain like Bitcoin. Glassnode’s data hints that miners have moved their operations away from China. In May, China’s crackdown on mining operations caused over 50% of network hash-power to come offline.
Also, as per Coinshares Digital Asset Fund Flows Weekly Report, Bitcoin led inflows for the third week as digital asset investment products attracted $90 million in funds. Investors poured a total of $68.7 million into Bitcoin-backed investment products.
Meanwhile, BTC prices broke above the $50k mark on Oct 5 for the first time in nearly a month. However, prices pared before bulls could flip the price level into resistance.
What The Glassnode Report Says
The Glassnode report highlighted Bitcoin’s return to profitability, indicating that the investors treated BTC’s consolidation near low $40k levels as buying opportunities. It further stated that nearly 86.6% of all circulating BTC are in profit right now.
In addition to on-chain metrics, the report highlighted the revival of the crypto mining industry from its ‘most dramatic short term disruption in all history.’ Glassnode analysts added that BTC’s hash-power network recovered steadily since late July.
Glassnode further highlighted that mining difficulty, a measure of how difficult it is for a miner to hash a block successfully, has returned to its pre-mining ban levels. Since July, mining difficulty has increased by 39%, with another upwards adjustment of 3.9% expected this week.
The report also pointed out Bitcoin’s difficulty ribbon’s imminent reversal to signal full recovery. In detail, the difficulty ribbon consists of eight different simple moving averages of the difficulty level of BTC mining. The metric links to selling pressure provided by miners in the market.
Glassnode asserts the ribbon would flip completely after the next upwards difficulty adjustment. Finally, Glassnode noted that total miner revenue is up significantly despite a 50% decrease in block rewards (12.5 BTC to 6.25 BTC).
The report highlighted that the current aggregate mining income of $40 million per day is up by 275% compared to miner revenue before the halving. Compared to post-halving miner revenues, the current income has grown by a whopping 630%.
The increasing Bitcoin block reward value incentivizes the market ‘to adapt, innovate and recover,’ the report concluded.
Investors Pouring Money Into Bitcoin
In other news, a report from digital assets manager Coinshares revealed assets backed by Bitcoin received $68.7 million in inflows last week. Ethereum-backed investment products came a distant second, logging $20.2 million in inflows.
Investor confidence in Bitcoin is high thanks to positive statements from both the SEC and the Federal Reserve. The Fed chair Jerome Powell recently announced the central bank does not intend to ban cryptos like China. Meanwhile, the SEC is mulling approval of Bitcoin-backed exchange-traded funds (ETFs).
ETFs allow traders to invest in Bitcoin without having to own the flagship crypto. However, the Coinshares report highlighted that volumes remain low at $2.4 billion, almost 25% of May 2021’s $8.4 billion.
Altcoins XRP, Bitcoin Cash, and Litecoin saw zero inflows or outflows, while DOT and BNB witnessed $800,000 outflows.
Bitcoin Price Chart
Bitcoin prices breached the $50,000 level before correcting. Nevertheless, BTC’s 7-Day long uptrend continues as bulls push prices upwards. However, for sustained upwards movement, BTC needs to consolidate above $50k. Immediate resistance for Bitcoin is near the day’s high at $50,653.
Once bulls establish a stronghold above the $50k mark, the next targets would be resistance $51,856, followed by resistance at $53,076, very near to BTC’s Sept high of $53,397. On the other hand, immediate support for Bitcoin is at $48,830, which acted as a resistance between Aug 13-Aug 20 and between Sept 15-Sept 20.
The next support is near BTC’s 50-Day (Green) Moving Average at $47,176, followed by support at $45,540, which acted as a resistance between Sept 21-Oct 1.
Meanwhile, Bitcoin’s MACD continues to be bullish as the momentum oscillator’s MACD line (difference between 12-day and 26-day EMA) moves further away from its signal line (9-day EMA of MACD). For now, BTC is bullish across all time horizons, as its price trade above its short and long-term moving averages.
At the time of writing, BTC was trading at $49,934, up 2.05% on the day.