Bitcoin (BTC) is in a tough battle between bulls and bears, and the network is now responding as data shows.

Trackers show that the Bitcoin difficulty broke the 18-week green line this week, marking its first decline since July.

The difficulty level is adjusted to a 20% drop in the bitcoin price
In the midst of cyclical short-term price movements, there is still concern that Bitcoin has not completed a withdrawal from its recent record high of $ 69,000.

Surprisingly analysts and even those who reject a single price model for life, BTC / USD looks like unknown territory over the past month – despite having almost doubled over the course of the year.

“With bitcoin now down more than 20% from the all-time high, headlines in the mainstream media have announced that bitcoin has entered a bear market,” concludes online research center Glassnode in its latest weekly newsletter, The Week On-Chain. ”

“However, it may surprise some readers that the current market correction will actually be the least severe in 2021. Some may say that things are business as usual for Bitcoin HODLs.”
However, online fundamentals are now absorbing the recent decline. The difficulty level fell 1.5% on Sunday after continuing to rise for nine consecutive periods. The next adjustment is currently expected to lead to a further decline of approx. 2%.

Average Bitcoin difficulty chart over 7 days. Source: Blockchain
Long-term shareholder spending creates “uncertainty”
Given the situation, Glassnode has not ruled out further price cuts.

On this topic: Bitcoin tests traders’ nerves when analysts publish $ 400,000 BTC price prediction

The combination of long-term sales from shareholders, massive open interest in derivatives markets and other phenomena may lead to a continuation of the downtrend to new local lows.

“Open influence on options and futures is at or near ATH, which raises some concerns about the increased possibility of crashes. It concluded that funding rates assume only a slight positive bias, making both long and short stress scenarios likely.”

And about the behavior of LTH, he added:

“Long-term owners have allocated 5.8% of the backlog since March, and there is some uncertainty about their spending structure.”

An annotated graph of the prices used by the holder over the long term. Source: Glassnode
Meanwhile, while discussing open interest, analyst Willie Wu noted that in an ETF environment, activity may simply remain higher and not necessarily indicate turbulence on the horizon.

“IMO, there is no need to wash it off,” he wrote on Twitter.

“This could be a signal that it’s time to use cash-based ETFs and leveraged trading.”
At the time of writing on Thursday, the BTC / USD exchange rate is around $ 56,000 after a repeated run to $ 59,000 and a subsequent rejection during the last 24 hours.

Source: CoinTelegraph

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