7 days of relief for investors as asset values have rebounded slightly since last week’s correction.
It’s green across the board for crypto prices today, rounding off 7 days of relief for investors as asset values have rebounded slightly since last week’s correction. Bitcoin is trading hands at around $38.9k, up 7% week-on-week. Continuing the theme of the past few months, this move has come hand-in-hand with other risk assets. There has been a marked correlation with low-profitability tech stocks in particular, as noted in a recent report by Goldman Sachs. Goldman suggests that the increasing correlation with traditional market variables is a consequence of bitcoin’s ever-growing mainstream adoption and that crypto assets’ recent slide was the first to be primarily driven by macroeconomic trends — something we will see increasingly more of as the asset class matures. JP Morgan has slashed their long-term price prediction, from $150,000 to $40,000, noting that any enthusiasm for institutional adoption is being curtailed by crypto’s significant price volatility. Morgan Stanley strikes a less bearish tone, however, reminding us that a 50% drawdown is nothing new and that bitcoin has survived 15 past bear markets. They point to $28k and $45k as levels to watch out for.
14-day average network hashrate is down slightly to 190 EH/s, though this does not constitute a noteworthy departure from the past 6-months. Difficulty, currently at 26.6T, is set to remain at a similar level after the adjustment due later this week. Temporarily static difficulty could provide a platform for hash price — up to $0.18 following last week’s 12-month low — to stage a much-needed recovery if bitcoin price can pick up momentum. Network hashrate is unlikely to be placid for long as industrial-scale bitcoin miners come ever closer to bringing new sites online. Happy mining!