Bitcoin’s(BTC) bearish grip tightens as the price continues to slide below crucial support levels. This raises concerns about further price drops in the coming days, especially with significant volatility expected as the first half of the year draws to a close.
The recent price action paints a bleak picture. Bears dominate the market, with Bitcoin failing to hold a key ascending support line. Traders and institutions seem to lack optimism, and a much-anticipated resurgence from whales remains elusive.
A central question plagues market participants: Where’s the recovery?
Historically, deep pullbacks trigger buying sprees from bullish actors, leading to swift price rebounds. This time, however, the rally sputters due to a significant drop in trader confidence and a lack of bullish intervention.
Analyst Willy Woo sheds light on this unusual behavior. Bitcoin’s(BTC) price has been stuck in a consolidation phase for over 100 days, and Woo believes miner behavior is a key culprit.
The “weak miners,” those struggling with post-halving revenue cuts, haven’t been eliminated yet. This prevents the hash rate, a measure of mining difficulty, from recovering.
These weak miners are forced to sell their Bitcoin(BTC) holdings to cover operational costs or upgrade hardware. This creates substantial selling pressure, which will only cease once these miners are squeezed out, leaving only the industry’s strongest players.
Previous halving events (reductions in Bitcoin created per block) offer historical context. In 2016 and 2020, the hash rate recovered within 24 and 8 days, respectively. However, in 2024, 62 days after the halving, the hash rate remains stubbornly low.
The strong, elevated hash rate trend seen in late 2023 has reversed dramatically, with no signs of immediate recovery. Analysts believe a significant price upswing hinges on the elimination of these weak miners, paving the way for a more sustainable bull run. Until then, Bitcoin(BTC) may remain in a prolonged consolidation phase.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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