Bitcoin (BTC) broke as low as $26,500 yesterday and then started to recover back to that $27,400 where the price is once again running into resistance. Bitcoin took a slump this morning, but as of this writing, it’s back up to $27,400 on Binance and $25,330 on Bitvavo. This means that the bitcoin price is up 2% today. The total market capitalization is $531 billion and the dominance is 46.6%. The Fear & Greed Index comes out at 51 (Neutral).
Bitcoin Fear and Greed Index is 51. Neutral
Current price: $27,402 pic.twitter.com/wrKxQasEcC— Bitcoin Fear and Greed Index (@BitcoinFear) May 18, 2023
US debt ceiling
Bitcoin has been stuck in this tight range for a while now. The macroeconomic situation keeps investors uncertain. The current discussions around the debt ceiling in the US seem to exacerbate this. Last time, such a situation caused a significant drop in the S&P 500 price, reports analyst Rahul. However, the correlation between bitcoin and the S&P 500 has declined sharply again this year.
🚨 Last debt ceiling standoff ended up causing a -18% drop in $SPX in 2011 and took about six months to recover.
Interesting disparity in the timelines between the banks. $GS $BAC $C $JPM pic.twitter.com/q1Y5Mk2Dgg
— Rahul (@rhemrajani9) May 17, 2023
Still, bitcoin rose along with stock markets yesterday as some hopeful news came out about the debt ceiling. However, it has not yet sparked much interest in the markets and fears remain high.
Joe Biden and Kevin McCarthy both express optimism a debt-ceiling deal can be made, possibly this week https://t.co/RqrMJTLcqu
— Bloomberg Crypto (@crypto) May 18, 2023
Tether wants to buy large amounts of bitcoin
Positive news from Tether, the company behind the huge USDT stablecoin, also has little effect on the price. Tether plans to regularly use 15% of its profits to buy bitcoin for its reserves. Normally you would expect a stronger increase with such news.
Tether🧡#Bitcoin
Starting this month, Tether will regularly allocate up to 15% of its net realized operating profits towards purchasing Bitcoin. These Bitcoin shall be considered on top of the minimum reserves assets that 100% back tether tokens.
More 👉 https://t.co/7zC2swgwWH pic.twitter.com/BOcSDjjmDf
— Tether (@Tether_to) May 17, 2023
Bitcoin volatility extremely low
The uncertain situation has caused bitcoin’s volatility to drop to a remarkably low level. Lucas Outumuro, IntoTheBlock’s head of research, reports that historically this situation could lead to a strong breakout, but that could be up or down.
Bitcoin’s volatility has dropped to historically important levels
60D annualized full is under 40% for the 8th time in last 5 yrs
On average $BTC vol remains below this level for 5 weeks and results in a 46% price gain
These conditions also preceded 3 crashes or 50% pic.twitter.com/G4YIZLvcsQ
— Lucas (@LucasOutumuro) May 16, 2023
The number of active users is falling sharply
In addition, the number of active users is decreasing at a remarkably fast pace. Analytics firm Santiment reports that fewer than 800,000 unique addresses are making a transaction on the network per day, the lowest since July 2021. This happens despite the recent craze for Ordinals, inscriptions, NFTs and BRC-20 memecoins.
📉 #Bitcoin‘s utility has shown some serious dropoff here in May, as prices have corrected market-wide. For the first time since July, 2021, we’re seeing less than 800k daily unique $BTC addresses transacting on the network. https://t.co/ZDzKhjqNeZ pic.twitter.com/jd8y4vuSCE
— Santiment (@santimentfeed) May 17, 2023
Most BTC investors in distribution mode
Voglen’s analytics company Glassnode therefore appears to be in distribution mode rather than accumulation mode. Virtually all types of investors are distributing “aggressively,” Glassnode reports. Even the greatest whalesinvestors with more than 10,000 BTC have stopped accumulating.
When assessing the #Bitcoin Accumulation Trend Score by Cohort, we note that the largest of Whales (>10K BTC) have transitioned from a regime of heavy accumulation to one of equally balanced inflows and outflows.
With all other major cohorts aggressively distributing coins, the… pic.twitter.com/mzoORrDyhs
— glassnode (@glassnode) May 17, 2023
Bitcoin mining difficulty rises to new record
Despite this, the so-called bitcoin mining difficulty has risen again this morning. This is automatically adjusted approximately every two weeks, depending on the hash rate, or computing power of the network. Mining difficulty rose 3.22% this morning to a new all-time high of 49.55 T at an average hash rate of 354.55 exahashes per second.
#Bitcoin difficulty ticks higher with a positive adjustment tomorrow. The hash rate has also started to climb again, hitting 350 th/s for the first time ever (30DMA). pic.twitter.com/PIRXrjWgSB
— James V. Streets (@jimmyvs24) May 17, 2023
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