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The price of Bitcoin lowered to New Year's Eve, as trading volumes continued to decline following another failed rally attempt to the north of $ 4,000. Bitcoin's mining difficulty was adjusted higher for the first time in almost three months since the hashish rate of the network has slowed its decline.
Strong resistance
Bitcoin prices have continued to decline over the past 24 hours, dropping below $ 3.700 on most major stock exchanges. At the time of writing, BTC / USD was valued at around $ 3,690 on Coinbase, Bitstamp and Bittrex. It traded at $ 140 premium on Bitfinex, where the price could be seen at $ 3,834.
The aggregate data courtesy of CoinMarketCap show an average price of $ 3,735.84, down 1.7% on the day.
The volume of Bitcoin exchanges has fallen sharply since Friday, which marked the last rally attempt for the main digital currency. Trade volumes exceeded $ 5.7 billion at the end of last week, as prices briefly exceeded $ 4,000. However, volumes fell 28% to $ 4.2 billion.
While most of the trading activity continues to be held on BitMEX, the trading share of total revenue declined dramatically after the selloff height at the beginning of December. Since Tuesday, BitMEX has processed more than 13% of the volume based on bitcoin exchanges, down from a maximum of over 40% during the bear market.
Bitcoin continues to face strong resistance at $ 4,000, followed by the $ 4,200- $ 4,500 region (the latter represents the trading range from the most recent breakout attempt that has also faltered).
Increases the difficulty of extraction
For the first time since the beginning of October, the bitcoin mining difficulty has increased, a sign that the miners were deploying more hash power in the network. Bitcoin's scarcity of mineral resources increased by almost 3% last week after plunging 31.5% from the previous quarter. As Hacked reported last month, there does not seem to be a comparable decline in mining difficulties over the years, reflecting the severity of the recent bear market trend.
The following chart, courtesy of Blockchain.com, highlights the extension of the recent skid.
At the same time, the network hash rate reversed its decline following a prolonged downtrend (again, data provided by Blockchain.com):
The network hash rate increased 35% in December to 43,291,797 TH / s. This is still well below the August peak of 61.8866,256 TH / s.
The mining difficulty of Bitcoin declined in the fourth quarter after the sudden collapse in prices that provoked a mass exodus from the digital currency space. The combined market capitalization of all cryptocurrencies fell to a low of around $ 100.4 billion before a recovery began in the second half of December. Millions of bitcoin mining plants have been shut down in the process. Read more about CCN: the Bitcoin mining industry "Under considerable stress", 1.3 million deactivated devices.
Since it hit the low of close to $ 3,100, the price of bitcoin has recovered over 20%. Bearish pressures are expected to persist for the foreseeable future as investors assess the latest regulatory and institutional developments.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. It holds investment positions in the currencies, but does not carry out trading activities in the short term or daily.
Featured image courtesy of Shutterstock.
