Mining Difficulty Soars, Strong Q1 Ending, & Web3 Investing
APR 04, 2022 • 5 Min Read
Chart of The Day: Mining Competition Heats Up
- Mining difficulty is defined as how difficult it is for miners to mine a block of transactions into a blockchain. Bitcoin’s mining difficulty adjusts every 2016 blocks (~14 days) and is based on the hash power that competes for mining rewards on the network. As more miners enter the network to compete for blocks, this pushes the hash rate and difficulty up in the next adjustment.
- BTC mining difficulty hit new highs at 120 ZH/s, the toughest it has ever been to mine a Bitcoin. This comes as Bitcoin supply crossed 19M, making there only 2M Bitcoin remaining left to mine. As BTC heads into the next halving estimated in 2024, we can expect fiercer competition as every Bitcoin becomes more valuable.
- Furthermore, as entities like Luna Foundation Guard accumulates Bitcoin and utilize it in their ecosystem, this further reduces the circulating supply available on the market.
- For more, Delphi members can read our recent markets note touching on BTC here.
Goodbye Q1, You Won’t Be Missed
[Excerpt from our Mar. 30 Market Insights]
- The crypto market has been showing signs of strength as we close the books on a volatile Q1. For context, BTC still remains within its $30K trading range, oscillating between $32K-$62K. As Q1 comes to a close, let’s revisit the weekly market structure for Bitcoin to see where we find ourselves.
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BTC is ending the quarter in a much better place than where it started the month. Quarterly closes are important because they’re often scrutinized by many types of market participants. A strong monthly or quarterly close can inform a bullish bias for traders and investors with longer time horizons. Algorithmic traders can also use quarterly (or monthly or weekly) closes as triggers for certain trend or momentum-based strategies.
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Despite the strong end to Q1, BTC’s price appears to be heading into some resistance at the time of writing. Notably, BTC also finds itself at the midpoint of the weekly market structure.
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In addition, BTC also finds itself above the high volume node boundary located around $42-$44K. Keep an eye on this area should price revisit it in the coming days. As of now, the weekly market structure looks prime for a trend shift, barring any drastic turn in market sentiment.
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Long-time readers will be familiar with the Guppy Analysis, as it has been one of our favored trend-following tools over the last 2 BTC cycles. In short, using the Guppy Multiple Moving Average has kept participants away from false bottoms while BTC has been in its four month downtrend.
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In the last 7 days, the GMMA has finally confirmed a full bullish crossover between the short-term MA grouping (blue) and the long-term MA grouping (red). This is the first time that we have seen a confirmed bullish crossover with this tool since the November 2021 ATH. The previous occurrences of crossover signal triggered were the 2021 summer lows, and the April 2021 market high, with both leading to multi-month trend reversals.
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If BTC begins to lose momentum after this rally, look for the long-term MA grouping (red) to act as support should price retest this area.
Up, Up & Away
- The last two weeks provided an extremely rare occurrence for bitcoin as it notched 8 consecutive days of positive price gains. Over the last seven years when looking at consecutive positive days for bitcoin returns, this trigger event only happens 1.3% of the time, making this is a very rare event.
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We also looked at the 1D, 3D, and 7D forward returns for BTC after prior instances of eight consecutive days of positive gains. Granted, there are only seven prior occurrences, so take this with a grain of salt.
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In the first few days after the event, BTC was largely neutral to slightly negative. But it did see an average return of 8% in the week following the event.
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The more consecutive days an asset’s price increases, the more likely the next day will be a reversion to the mean. In order for BTC to complete 8 positive days in a row, it needs to have some pretty strong momentum backing it. Prior instances saw a short consolidation period before another leg higher…let’s see what happens this time.
- For more, Delphi members can see our latest Market Insights here.
Web3 Is the Logical Next Version of the Internet: Sahil Bloom, Investor and Co-Founder of The Room Where It Happens
[Excerpt from The Delphi Podcast]
- Our Web3 series continues with Sahil Bloom, Investor and Co-Founder of The Room Where It Happens. We talk about investing in Web3, differentiating community governance and ownership, onboarding the next wave of users into crypto, and much more!
- Resources:
- More
- For more, you can see our latest Delphi Podcast releases here.
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@redactedcartelhttps://t.co/CgDDvRUwGp
— zon (@ItsAlwaysZonny) April 2, 2022
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StarkGate Alpha Live on Testnet
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