The price of Bitcoin has been stagnant in the first half of April, trading in a tight range of $6,750 and $7,350. Currently, BTC/USD is trading around $6,800 while the market remains in “extreme fear,” as per the Crypto Fear and Greed Index with a reading of 15, just a slight uptick since the sell-off in mid-March.
Also, for the first time in a long time, the Bitcoin network didn’t grow. In fact, the network lost 450 thousand addresses. “Over the past week, Bitcoin averaged a total of 382.95 thousand new addresses per day vs 448.27 thousand addresses that went to zero per day,” observed IntoTheBlock.
The lack of movement, while we are just 26 days from the halving has the Bitcoin investors to focus on HODLing as evident from the BTC balance on exchanges.
In early January, the exchanges’ balance was at 2,412,326 BTC. But in February, it started sliding down and the March sell-off only has these Bitcoins moving out of the exchanges faster.
The last time the balance was this low was in June 2019.
“Investors are withdrawing Bitcoin from exchanges – potentially indicating a shift to longer-term holding strategies,” noted Glassnode.
“BTC balances have fallen nearly 10% from the highs seen in January.”
Epic difficulty adjustment coming
While investors are going with HODLing, the hash rate of the network is back to increasing and is down just 6.7% from the all-time high in March.
This growth in Bitcoins’ hash rate could also be because of the Bitcoin Cash and Bitcoin SV miners shifting to Bitcoin as both the forks hash rate continues to decline while BTC’s is marching towards a new high yet again after a temporary pullback in response to a steep drop in Bitcoin price.
However, Bitcoin currently has over 99% of the hash rate share and at this point, both the cryptos are “irrelevant and immaterial.”
Bitcoin Hashrate reaching all time highs again! pic.twitter.com/EbbexKklJl
— Poolin (@officialpoolin) April 14, 2020
The rising hash rate has yet another “epic” difficulty coming in five days. What it means is, “miners have great confidence and are investing billions in new mining hardware. Yes some small miners with old equipment and expensive electricity will stop, but the industry as a whole is getting larger, more professional and stronger, and so is bitcoin,” said analyst PlanB.
Difficulty adjustment ensured that every block is mined every 10 minutes. Currently, the rising hash rate test new mining hardware has the blocks being founded faster but this adjustment will see it corrected.
— PlanB (@100trillionUSD) April 15, 2020
As for what effect it would have on price, it would be an indirect one via stock-to-flow as “if blocks would come in too fast, S2F would rise too fast, and investors/price would not have time to keep up. DA keeps btc money supply nice and predictable.”
Overall, the analyst believes this is “great” that the efficient miners are investing billions of dollars in new mining hardware which suggests their confidence in bitcoin’s future.