Despite the fundamental health of the network, investors could not seem to take their eyes off the sentiments that abound in the broader stock market and the accompanying fears of an increase in interest rate by the United States Federal Reserve.
The price of Bitcoin (BTC) slid to $38,560.45, its lowest level in more than 90 days as the industry continues to weigh the broader sentiment trailing the stock market amid an expectation of interest rate hikes. While currently changing hands at $38,913.80, atop a 7.79% slump in the past 24 hours, the bearish trend Bitcoin has been charting in the past few weeks shows a complete antagonism to the network fundamentals.
This fundamental includes the network difficulty and the hashrate, both of which have notably hit new levels today. Per data from BTC.com and Glassnode, Bitcoin difficulty is currently at an All-Time High (ATH) after soaring by more than 9.3%. Correspondingly, the overall hashrate of the network hit 197 EH/s.
#Bitcoin mining difficulty increased by +9.3% today, hitting a new ATH.
Chart: https://t.co/1cFkveEgJN pic.twitter.com/sXBgrr3SKF
— glassnode (@glassnode) January 21, 2022
The growing difficulty is an indication of network health, one which is supposed to be a reference point for investors to trust Bitcoin, and its promised decentralization features. The industry has passed through a reasonably tumultuous era that was ushered in when the Chinese government banned Bitcoin mining in the second half of last year. The ban introduced a major offset to the computing power plugged into the network as miners went on forced migration in search of a welcoming base from other crypto-friendly nations.
It is worthy of note that the ban brought better days for Bitcoin as it ripped apart the centralization that China enjoyed in terms of harboring a major share of the Bitcoin hashrate. The recovery of the mining industry is arguably healthy in all aspects as several countries including the United States, Kazakhstan, and Russia amongst others now collectively share the hashrate now.
Slump in BTC Price
Despite the fundamental health of the network, investors could not seem to take their eyes off the sentiments that abound in the broader stock market and the accompanying fears of an increase in interest rate by the United States Federal Reserve.
The distraction brought about by the macroeconomic uncertainty has led in no small measure to the slump in BTC price as we are currently experiencing. Additionally, many countries where Bitcoin has found solace are having internal wranglings that are keeping investors agitated on the potential of the network’s future.
The Central Bank of Russia recently published a report where it advocated for the complete ban on Bitcoin transactions and all mining-related activities. The apex bank also recommended that the current stance of the country as it concerns Bitcoin should be accompanied with capital punishment for violators of extant rules. Perhaps some investors are weighing in on these reports to push off their assets with the growing uncertainty.
Worthy of note also that Bitcoin is constantly under attack by sovereign governments. However, the continued invasion of the industry by institutional investors can go a long way in reshaping broader perception about cryptocurrency, and the industry at large, and thus help in the imminent price recovery in the near future.
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
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