Bitcoin (BTC) Accumulation Continues with Record Mining
Bitcoin (BTC) is once again closing in on the $40,000 range. The last days of April may add volatility as futures are settled on the last Friday of the month. BTC remains volatile, dipping under $39,000 twice this week and quickly recovering.
Late on Thursday, BTC bounced by hundreds of dollars within minutes, rising to $40,220.39, then retreated to the $39,500 range. Trading volumes stuck to their usual range at $32B in 24 hours, while Tether (USDT) volumes reached $64B in 24 hours, covering other coin and token pairs.
A price move like that will not forestall further dips. After the month end, there are expectations BTC may test highs and then return to another deeper crash. The Crypto Fear and Greed Index is again at 24 points or “extreme fear”, showing caution in expectation of significant price swings.
The pattern of rapid crashes and spikes, affecting leveraged positions in that range, continues as a short-term driver of price action. BTC has a dominance of 41.7% in terms of market cap, slowly recovering while other assets remained with little change.
BTC is now mostly decoupled from other assets and ecosystems, and may also have its separate factors to rally. Yet the overall expectation is that the year would run with unpredictable performance. For BTC, this means a wide bearth of error, from rallies to new highs to a potential dip. Most extreme bearish attitudes see BTC dipping as low as $18,000.
BTC Buying Continues
Despite the price fluctuations, BTC now exists with unique bullish factors that may signal both acceptance and higher values down the line. BTC is more widely accepted as an investment tool, and has been made part of retirement portfolios for US clients. Still, most crypto enthusiasts still warn the best approach is to self-custody the coins.
BTC sees almost constant outflow from exchanges. Estimates see roughly 1,700 BTC leave exchanges every day and not returning. This is almost twice the amount of new BTC mined, and the scarcity is becoming very visible.
Large-scale wallets continue to grow, with the goal of using BTC as collateral in decentralized finance. For others, BTC is a reserve and a hedge against inflation, as well as a long-term bet.
Mining Expands to All-Time High
About a year ago, BTC mining had a sudden dip when China banned mining farms in Sichuan. This also led to a price crash from the yearly highs.
Toward the end of April 2022, mining activity picked up and constantly made new highs. Currently, miners produce an estimated all-time high above 222 EH/s. Miners also make up some of the biggest BTC wallets, holding onto their coins instead of selling to cover expenses.
Foundry.USA is now the biggest mining pool by share of blocks produced, grabbing 18.75% of block rewards. Binance pool is now second, while previously hot pools from mainland China have stepped back to a much lower share.
BTC also sees increased “shadow mining” from unknown entities. There are even solo miners that manage to solve a block occasionally, a rare but not impossible feat. With more powerful ASIC available, BTC mining is viable again and even demands less electricity for a higher hashrate. At current prices, running a rig may bring above $6,800 per year, leading to increased demand for both pooled and solo mining.
What is the Next Step for BTC
The current bounce from this week’s lows is considered one potential bottom. BTC is making higher lows and may try to recover previously lost price levels.
A short-term scenario also sees a temporary slide to a lower range, with one more dip before a new breakout.
BTC has historically rallied in Q2. For now, the asset has not gone through a quarterly correction and has been stuck in a range for months.
Market Continues with Meme Potential
The coin of the day with an outsized rally was again Apecoin (APE). APE is up 14.17% and rose to $22.19, with an outlook of extending its gains.
APE is now headed toward the top 20 of coins and tokens by market capitalization. APE is now on track to flippen TRON (TRX) and other previously hot assets. Altcoins also have periodic pumps, as the markets are flooded with stablecoin liquidity.
In the past month, $1.5B in value flower in with new Tether (USDT) mints, but was offset by a lowered supply of USDC. The market is also creating smaller hubs of liquidity with newly created stablecoins. Terra USD (UST) now has 18.4B tokens overall supply and is the tenth largest asset by market capitalization. UST even displaced Binance USD (BUSD) as the third most numerous stablecoin.
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