While the crypto market is far from its March peak, analysts say the fundamentals of the Bitcoin network remain strong.
According to the latest Bitfinex Alpha report, Bitcoinâs foundational strength is underscored by key factors like the steadfastness of long-term holders and the plunge in mining difficulty. These factors indicate that the network is positioned for future value appreciation.
On-chain data indicates that long-term holders are not selling their bitcoins (BTC) but have been holding onto them for the past two weeks. Analysts said this cohort of investorsâ recent activity reflects their strategic positioning for potential entry points at market lows.
Conversely, short-term holders are still taking profit and increasing selling pressure. Analysts revealed this may be a sign of panic and a shift of liquidity toward altcoins, potentially reversing price rallies if not supported by long-term investor purchases. If these market dynamics persist, it would be safe to assume that the short-term bottom is in and bitcoinâs current multi-month range could head to the upside.
These developments come as mining difficulty declined by 6%, its largest decrease since December 2022. The difficulty measures how many hashes must be generated to validate a Bitcoin block and automatically adjusts every two weeks or 2,016 blocks.
The reduction in mining difficulty indicates that the number of Bitcoin miners has declined, and it is less challenging to validate new blocks.
Moreover, Bitcoin recently processed its one billionth transaction, underscoring significant activity on the network. On May 6, when Bitcoin achieved the milestone, over 625,000 transactions were executed on the network, indicating the blockchainâs health and adoption as a digital asset.
The recent surge in Bitcoin activity over the past year can be attributed to the launch of new protocols like Ordinals and Runes and the spot BTC exchange-traded funds market, which has boosted the networkâs usage.
Despite Bitcoinâs growth and development, BTC currently struggles to remain stable above the $63,000 level due to negative economic indicators from the United States. At the time of writing, the asset was down roughly 2% in the past 24 hours and was trading below $61,600.
The post Bitcoinâs Fundamentals Remain Strong Amid Market Volatility: Bitfinex appeared first on CryptoPotato.
According to the latest Bitfinex Alpha report, Bitcoinâs foundational strength is underscored by key factors like the steadfastness of long-term holders and the plunge in mining difficulty. These factors indicate that the network is positioned for future value appreciation.
Bitcoinâs Fundamentals Are Strong
On-chain data indicates that long-term holders are not selling their bitcoins (BTC) but have been holding onto them for the past two weeks. Analysts said this cohort of investorsâ recent activity reflects their strategic positioning for potential entry points at market lows.
Conversely, short-term holders are still taking profit and increasing selling pressure. Analysts revealed this may be a sign of panic and a shift of liquidity toward altcoins, potentially reversing price rallies if not supported by long-term investor purchases. If these market dynamics persist, it would be safe to assume that the short-term bottom is in and bitcoinâs current multi-month range could head to the upside.
These developments come as mining difficulty declined by 6%, its largest decrease since December 2022. The difficulty measures how many hashes must be generated to validate a Bitcoin block and automatically adjusts every two weeks or 2,016 blocks.
The reduction in mining difficulty indicates that the number of Bitcoin miners has declined, and it is less challenging to validate new blocks.
Crypto Market in Turmoil
Moreover, Bitcoin recently processed its one billionth transaction, underscoring significant activity on the network. On May 6, when Bitcoin achieved the milestone, over 625,000 transactions were executed on the network, indicating the blockchainâs health and adoption as a digital asset.
The recent surge in Bitcoin activity over the past year can be attributed to the launch of new protocols like Ordinals and Runes and the spot BTC exchange-traded funds market, which has boosted the networkâs usage.
Despite Bitcoinâs growth and development, BTC currently struggles to remain stable above the $63,000 level due to negative economic indicators from the United States. At the time of writing, the asset was down roughly 2% in the past 24 hours and was trading below $61,600.
The post Bitcoinâs Fundamentals Remain Strong Amid Market Volatility: Bitfinex appeared first on CryptoPotato.
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