With Bitcoin Breaking Through $49,000 Are We Set for a New Bull Run?
The currency market rose sharply on Tuesday, resuming the volatile trend that has been in place since the emergence of the Omicron COVID-19 variant.
The US stock market rose in lockstep, with the S&P 500 index rising 81.21 points or 1.8%. The NASDAQ Composite Index gained 360.14 points, or 2.4%, during the day. The Dow Jones Industrial Average gained 560.54 points or 1.6%.
In the currency market, BTC rose 4.88% in 24 hours, breaking through $49,000,
and ETH rose 3.2% in 24 hours, returning to the $4,000 range.
This series of gains has instilled great confidence in all investors. As a result, the market sentiment Fear & Greed Index has broken through 40 for the first time recently, much like a round of warm sun in the cold winter. After all, it’s been below the 30 mark for nearly two weeks.
Some analysts have compared this increase with the trend in 2020 and received a lot of positive feedback. Everyone is looking forward to something good to happen.
According to technical personnel analysis on CoinDesk, while Asian key players dominated the crypto market for the majority of 2021, the momentum has shifted in the latter half of the year.
“With Huobi’s exit from the Chinese market completed last week, selling pressure from Asia appears to be slowing,” Hong Kong-based cryptocurrency bank Babel wrote in its weekly newsletter on Tuesday.
As a result, the most significant pressure is gradually being reduced, and the likelihood of entering a new bull market remains very high.
From a crypto mining standpoint, the hash rate has dropped by nearly 8% since a record high of 167.39 EH/s on December 9. The significant increase in hash rate hastened block production, resulting in an 8.3% difficulty adjustment just two days later. The increase in mining difficulty reduces miners’ profitability, incentivizing them to shut down less profitable machines and reduce the overall hash rate as a result.
Another key trend that emerged in the second half of this year is that miners are holding Bitcoins rather than selling them. The number of miners withdrawing coins to exchanges has been decreasing. The rise in hash prices, miners’ profitability, and the growing trend of large miners using cheap debt or Bitcoin proceeds to fund operations has meant less pressure on miners to force the sale of their currencies.
Returning to the market supply relationship, it appears there is no direct driving force compelling miners to sell. Therefore, the available supply in the market is less than the demand, and the price of Bitcoin has upward momentum.
At present, the futures holdings have recovered quickly. The currency standard is BTC 375K. If it continues to climb back to the high of 400k, it is time to choose the right direction promptly.
It’s fast approaching the end of the month. After Christmas, there is a high probability that a callback will still be required. Presently though it looks like the next Bitcoin bull market could begin as early as the first quarter of 2022.
