Bitcoin (BTC) starts a new week in uncertain times after recovering the USD 9,000 mark, but where is the BTC/USD pair headed in the next few days?
Cointelegraph Markets highlights five factors driving Bitcoin price action for the new week.
Stock Optimism Returns with USD 9,000
After a big drop on Friday, stock futures rose early on Monday, despite continued pressure from Covid-19 concerns.
Dow Jones, S&P 500 and Nasdaq futures rose modestly, consolidating a quiet weekend in which Bitcoin outperformed in terms of volatility.
The BTC/USD, which has shown a tendency to copy stock market movements over the past few weeks, briefly lost support at USD 9,000 on Sunday before rebounding.
OKEx announced the listing of the COMP token of the decentralized finance protocol Compound
The move had been long, most of last week the USD 9,000 mark proved to be a slow five-figure drop.
Further weakness in the S&P 500, with which Bitcoin has correlated 95% in recent months, could be particularly damaging in the short term, trader Tone Vays warned Thursday.
However, some traders were optimistic. Michael van de Poppe, an analyst at Cointelegraph Markets, noted that even with recent lows of around USD 8,900, Bitcoin was still up 140% from March.
BTC investment remains well ahead of stocks for the second quarter, with gains of over 40%.
The difficulty can be adjusted downwards again
Last week’s bearish momentum seemed to take its toll on Bitcoin’s network fundamentals. The difficulty, set for an adjustment in about 30 hours, has become negative.
If the trend continues, a downward shift would contrast sharply with the 15% increase seen during the last adjustment two weeks ago.
The hardship is an essential mechanism that ensures that miners are encouraged to participate in the Bitcoin network, and the automatic adjustments work as „economic policy.
Bitcoin’s hash rate has also levelled off; in contrast, it saw gains of around 10% last week. The average weekly activity was 115 EH/s at the close of this edition.