A Major Breakthrough for Bitcoin Price: PoW Model Predicts Crucial Moment
The Bitcoin price is currently in its second year of a bear market following the 2021 crypto bull market. It has declined by approximately 66% from its all-time high of $68,789, reached on November 10, 2021. According to Coinmarketcap, which is backed by Binance, the largest cryptocurrency by market cap is trading at $22,859 per coin, down 1.7% for the day.
While the stabilization of Bitcoin’s volatility is in line with expectations for a consolidating year, there is increased fear of another market crash, leading to increased selling pressure from both short-term holders and miners. The unresolved cases of FTX and Alameda have caused distress for hundreds of institutional investors and millions of retail traders.
Bitcoin Under The Microscope: Glassnode’s Analysis
The Bitcoin market has been tracked by on-chain analytics firm Glassnode through the PoW pricing model for years. According to it, Bitcoin is still in the zone recorded in the past two halvings. However, the price retested the lower 1.41 level a year before the halving, thus putting the asset at risk of another capitulation.
“The price per coin is now almost double the estimated cost of production, leaving the 1.41 level behind. Hope, Relief? At the time of the last two halvings, the price was at the upper level. Are we going to break it now or stay in the zone?,” one Twitter user, @paulewaulpaul, noted.
In a recent report, Glassnode highlighted that short squeezes within the derivatives market have significantly impacted the underlying value.
“To date, there have been over $495M in short futures contracts liquidated across three waves, notably with declining scale as the rally played out,” Glassnode noted.