Mining Difficulty Exceeds 50 Trillion – 5 Things To Know In Bitcoin This Week

Bitcoin (BTC) is starting a new week in a very different mood as the weekly candle close takes a step higher.

The largest cryptocurrency, still stuck in a narrow range, is finally showing signs of life after several highs to lows in two months.

With volatility back in play, traders nevertheless remain conflicted – can a short span of time lead to an all-out trend breakout?

Opinions are divided as May draws to a close and brings with it a macroeconomic confrontation that is already being felt: the US debt ceiling agreement.

With an agreement to raise the ceiling and avoid a US government bankruptcy almost here, risky assets could get relief across the board. However, with the exchanges closed until May 30, it will be a game of “wait and see” for Bitcoin traders to start the week.

Of course, Bitcoin itself is always open and the debt ceiling seems to have provided a stimulus for optimism, despite representing little in terms of macroeconomic policy trends.

With that, the conversation within crypto is all about what happens next.

Cointelegraph takes a look at these and some other key factors to consider when it comes to BTC’s price action in the coming days.

The debt ceiling agreement is approaching Congress

After several weeks of drama, the Biden administration has formed and presented a solution to the US debt ceiling debacle and presented it to Congress.

While it remains unknown whether it will pass, bets are already ahead of the outcome.

“I think it’s almost certain that it will pass,” Jeremy Siegel, a professor of finance at the University of Pennsylvania, told CNBC, summarizing a popular theory.

Others have pointed out that a true doomsday scenario is unlikely as the deal currently stalled does not immediately open the US to a default scenario.

“The week ahead will continue to bring uncertainty about the debt ceiling as the deal works its way through Congress,” continued trading firm Mosaic Asset in the latest edition of its newsletter series, “The Market Mosaic.”

“We also get an updated report from the ISM on manufacturing activity, plus the May jobs report. Regardless of those headlines, I’m most closely following the action in the mid-market equity and cyclical sectors.”

News of the deal itself, meanwhile, instantly worked like magic on a lackluster BTC/USD, which saw classic week-end volatility to briefly reach $28,450 overnight.

The pair is currently trading at just under USD 28,000 and has managed to improve its outlook even though it is in the intraweek trend.

“That’s a really good BTC Weekly Close,” popular trader and analyst Rekt Capital responded.

“$BTC lost ~$27600 in support two weeks ago and has now positioned itself for a retest/recovery of the same level.”

Rekt Capital had previously warned of an imminent broader breakdown that could push BTC price action back to $20,000.

“Dip in black would be healthy and a successful retest there could position BTC for a revisit of ~$28800,” he said now, marking the zone to hold in case of another dip to support.

Analysis further raised the possibility of Bitcoin invalidating a recently formed head-and-shoulders pattern on daily time frames, which is usually linked to the start of a prolonged bearish phase.

#BTC successfully has Daily Closed above the red box at the top

Now a dip may be underway for another red box test

A successful retest at $27600 would not set alone $BTC up for a revisit for the higher $28000s

But also invalidate the Head & Shoulders#crypto #Bitcoin pic.twitter.com/p1wZvJh3KU

— Rekt Capital (@rektcapital) May 29, 2023

“BTC is in a very early bull market,” Rekt Capital added.

CME gap guides BTC price dip bets

With that, Bitcoin is fueling discussion as bulls move closer to testing the apex of what has been a stubborn multi-month trading range.

Those betting on a downtrend continuing this week have already literally been caught. Short traders saw $44 million worth of positions liquidated on May 28 alone, which represents a one-month high, according to monitoring source CoinGlass.

This move up is just bears getting a short squeeze, sideways action as bears reload their shorts, then another squeeze to keep them out again, rinse and repeat lol. We’ll probably keep pushing up until these bears calm down. $BTC pic.twitter.com/rEhyHmtfLY

— CrediBULL crypto (@CredibleCrypto) May 29, 2023

However, for well-known market participants, there is still reason to remain conservative about what comes next.

Trader Skew noted that Bitcoin’s rise over the weekend had opened a gap in CME futures, with the implication that BTC/USD would need to drop lower to “fill” it at the open.

“Might see a sell-off after a debt ceiling deal and then gold/btc run for the last carpet,” part of Twitter comment mention on May 29.

Fellow trader Mark Cullen noted that near $25,000 bid liquidity had shifted higher, with traders eager to get buy orders executed.

“Every time I do this I tend to hit myself in the head because it would have eventually been filled in,” he acknowledged, suggesting a return to that level remained on the table.

Trader Daan Crypto Trades, meanwhile, said the battle for the upside continuation is still on, with a “major” resistance level yet to be won.

#Bitcoin Test the upper resistance of this flag/wedge.

After confirming a breakaway, it should lead to the next leg up. pic.twitter.com/089VoJwBHG

— Dan Crypto Trades (@DanCrypto) May 29, 2023

Another milestone for Bitcoin difficulty

For Bitcoin network fundamentals, the trend is as decisively bullish as it has been at any other time this year – and new all-time highs are imminent.

Mining difficulty will increase by 2.5% on May 31, bringing it above 50 trillion for the first time ever, according to data source BTC.com.

Add the hash rate to the equation, which itself circles all-time highs, and the picture becomes clear regarding miner persuasion and competition.

Meanwhile, as noted by analytics firm Glassnode last week, miners have returned to hodling – increasing their overall BTC balances by holding more BTC income than they sell.

“Following a major Bitcoin outflow from the FTX implosion, miners (excluding Patoshi and early unlabelled miners) have expanded their balance by +8.2K BTC, increasing their holdings to a total of 78.5K BTC “, it reads. noted next to a chart.

William Clemente, head of crypto research firm Reflexivity Research, meanwhile, contrasted the current trend in hash rate versus spot price with Bitcoin’s price recovery in 2019.

One of the biggest differences between this Bitcoin bear market and the last one is that the hash rate did not hit new highs in 2019 until BTC reached ~3x its lows, while today the hash rate is more than 2x higher than its May high 2021, while BTC itself is only up to 75% off the lows pic.twitter.com/PMs9vn467Z

— Will Clemente (@WClementeIII) May 23, 2023

As Cointelegraph often reports, a popular mantra still used by some old market participants focuses on the spot price next hash rate on longer terms.

Hodl trend in “Only Up” mode.

Continued monitoring of Bitcoin hodlers yields few surprises – long-term investors are refusing to sell and chasing away more of the supply on a daily basis.

Thus, there is less and less BTC available for purchase as dedicated buyers drive Glassnode’s “Hodled and Lost Coins” metric to multi-year highs.

At 7,725,079 BTC, these “Hodled and Lost Coins” now represent more BTC than at any time since May 2018.

This month, Cointelegraph reported on short-term price trends that increasingly depend on the actions of short-term holders, typically correlated with speculative trading activity.

These investors, who have held BTC for 155 days or less, currently have a cost base of $26,500, making that level an important and hitherto successful support zone.

Additional findings, meanwhile, show that there are now also more Bitcoin wallets with a non-zero address than ever before — over 47 million.

MACD crossover can bring 50% profit

The return of a bull signal from 2023 is food for thought this week.

Related: Bitcoin Has Averaged 200 Weeks As Trader Says ‘Inflection Point’ Is Here

Moving Average Convergence Divergence (MACD), a bullish crossover followed by at least a 40% increase twice this year, has just experienced another such event.

The move was spotted by popular trader Captain Faibik, who confirmed the move on May 27.

$BTC MACD Bullish Crossover on Daily TF Chart.

In January and March 2023, Bitcoin experienced substantial gains of about 40% and 50% respectively after the MACD Bullish Crossover.

Will history repeat itself?#crypto #Bitcoin #BTC pic.twitter.com/XLISw3Yg9b

— Captain Faibik (@CryptoFabik) May 29, 2023

MACD subtracts the 26-period exponential moving average (EMA) from the 12-period equivalent.

A nine-day EMA of the result creates a so-called “signal line”, which provides a form of Bitcoin top and bottom signal compared to the MACD value.

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This article does not contain any investment advice or recommendations. Every investment and trading move involves risk and readers should do their own research when making a decision.