As 2023 nears its close, the Bitcoin landscape is undergoing significant transformations, both in terms of market dynamics and underlying network activity. From a steady price increase to unprecedented hash rate growth, these developments are reshaping our understanding of Bitcoin's potential and resilience.
The Bullish Market Trend
After an explosive October, Bitcoin’s upward momentum cooled off in November. However, the gradual climb towards $38,000 suggests the bullish trend may have more room to run. Expectations surrounding Exchange-Traded Funds (ETFs) and the upcoming Bitcoin Halving continue to fuel positive market sentiment, hinting at further upward movements as we approach year-end.
Key Historical Levels
Bitcoin has now navigated into the 'Early Bull' zone, maintaining weekly closures above $34,000 over the past month. This pivotal zone, ranging between $34,000 and $47,000, is likely a preparatory phase before the currency ascends into the 'Mid Bull' phase.
The Golden Ratio Multiplier
This early bull zone is further validated by the Golden Ratio Multiplier, where the upper boundary aligns with a rising resistance level. Currently, this multiplier sits at $43,116 and is expected to intersect with Bitcoin’s price trajectory between $44,000 - $47,000, potentially indicating a significant resistance area.
Long-Term Holders’ Confidence
Despite the price rise, Bitcoin's long-term holders remain steadfast. The 1yr HODL Wave, which measures the percentage of Bitcoin not moved on-chain for at least one year, has reached a staggering 70.8%. This uptick is partly attributed to the aftermath of the FTX collapse, leading to increased cold storage of Bitcoin and less on-chain movement.
Unprecedented Hashrate Growth
Parallel to the market trends, Bitcoin's network is witnessing an astonishing increase in hash rate. Since early September, the network has seen a 27% growth in hash rate, reaching 486.5EH/s. This growth is indicative of a new era in Bitcoin mining, marked by six consecutive upward difficulty adjustments.
Driving Forces Behind Hashrate Surge
Seasonal Changes: The end of summer has led to reduced demand on power grids in the Texas miners, allowing miners to increase operational hours and contribute to a more consistent block production.
Rising Bitcoin Price and Fee Markets: The appreciation in Bitcoin's price and demand for block space has led to increased miner profitability, spurring previously unprofitable operations back into action.
Advanced Mining Equipment: The introduction and activation of newer, more efficient mining rigs have significantly contributed to the hash rate increase.
Nation-State Participation: The new involvement of countries like Russia Oman and Bhutan in Bitcoin mining has added a geopolitical dimension to the mining landscape.
The Global Liquidity Factor
The trend in Global Liquidity, which reflects the amount of liquidity infused into the financial system by central banks, is a crucial element to consider. An increase in Global Liquidity often correlates with more investments in hard assets like Bitcoin and highlights the appeal of Bitcoin as an alternative to traditional monetary policies.
Looking Ahead to 2024
With Bitcoin’s price performance up by +125% so far this year and Global Liquidity trending upwards, 2024 promises to be a pivotal year. The Bitcoin Halving event, coupled with these favourable conditions, may catalyze an even stronger performance from Bitcoin in the coming year.
In summary, the intertwining of market dynamics and the surge in network hash rate paints a comprehensive picture of Bitcoin's current state. As the network continues to mature and attract diverse forms of participation, its role in the global financial landscape becomes increasingly significant. The coming months and the year ahead will undoubtedly be critical in shaping the future trajectory of Bitcoin.
Stay tuned as we continue to explore the evolving narrative of Bitcoin and its impact on the world of finance and technology.
As we stand on the brink of a new era, with Bitcoin leading the charge, it's crucial to remember the words of Andreas Antonopoulos:
'Bitcoin is not just a currency or a technology, it's a movement, a philosophy. It's about the empowerment of individuals over institutions.'
As we gaze into the future, towards 2024 and beyond, let us embrace this spirit of empowerment and innovation that Bitcoin embodies. The path ahead is not just about financial growth, but about the evolution of our global community in the digital age.
The Futurist Hodler