Bitcoin’s short-term outlook has turned decidedly bearish after a week of sideways action.
Bitcoin (BTC) price was testing support at $10,000 Aug. 22 as the largest cryptocurrency fluctuated between four and five figures.
Market visualization. Source: Coin360
Difficulty must touch floor before Bitcoin price moons
Data from Coin360 showed BTC/USD crossing the $10,000 mark multiple times over the past 24 hours.
Currently, the pair is hovering around the $10K mark, having traded in a corridor between $9,800 and $10,250 overnight.
Attempting to decide whether $10,000 will now form support or resistance, the latest moves follow on from a bearish trend, which saw BTC/USD drop to current levels from closer to $11,000.
Bitcoin 7-day price chart. Source: Coin360
Rejecting that barrier, the mood turned jittery among traders. As Cointelegraph reported, regular commentator Josh Rager had eyed a daily close above $10,200 as being necessary to preserve upside chances, something which Bitcoin ultimately failed to achieve.
Another popular social media-based analyst, The Crypto Panda, was more pessimistic still, warning on Wednesday Bitcoin faced a breakdown similar to November 2018. At that time, a sudden shift saw BTC/USD hit its local lows of just $3,100.
“After each ATH #bitcoin price drops until a lot of miners aren’t profitable. Miners switch off hardware (capitulate), hashrate drops, and difficulty adjusts downwards until miners become profitable again and difficulty rises,” the well-known PlanB added.
He noted mining difficulty — an indicator estimating the amount of computing power required to validate Bitcoin transactions — must bottom out before price highs appear. That pattern was evident following last year’s price drop.
“Difficulty bottom (100%) starts a new bull market,” he concluded.
In an indication of the behavior still impacting Bitcoin markets, weekly gains remain at almost 5% for traders, while monthly losses conversely circle around 1%. Three-month performance nonetheless remains extremely strong at 30% gains.
Altcoins seize rare chance to consolidate
Thursday marked an interesting day on altcoin markets, becoming one of the few days on which the majority of tokens were less volatile than Bitcoin.
In the current market retraction, that meant many traders were spared the losses affecting Bitcoin. Ether (ETH), the largest altcoin by market cap, dropped 1% compared to Bitcoin’s 1.7%.
Ether 7-day price chart. Source: Coin360
Others, such as XRP and Litecoin (LTC), also fared better, while Bitcoin Cash (BCH) and Bitcoin SV (BSV) matched Bitcoin’s moves.
The overall cryptocurrency market cap stood at $260 billion, Bitcoin’s share practically unchanged since Thursday at 68.8%.
