Bitcoin struggled to maintain $13,000 support on October 29 as a rejection at $14,000 sparked 24 hours of downward price pressure.
Data from price tickers including CoinMarketCap showed BTC/USD in a less bullish position on Thursday, briefly dipping back into the $12,000 range overnight.
At press time, the pair circled just north of $13,000, a level which analysts maintain provides solid buying support from major investors, so-called “whales.”
Volatility was high over the 24 hours after Bitcoin failed to tackle $14,000 in a manner reminiscent of last year’s peak.
Network fundamentals decline
At the same time, upheaval among miners caused both hash rate and difficulty estimates to drop—the end of “hydro season” in China means that many mining operators must now pay more for electricity.
Summarizing the current status quo, Bitcoin developer Jimmy Song suggested that reduced fundamentals provided an opportunity for more entities to get into mining.
“Miners in China offline because rainy season is over => Slower blocks => Higher fees => More miners in other parts of the world,” he tweeted on Tuesday.
“People will get interested in mining in about 12 months when we’re in a raging bull market. The right time to get into #Bitcoin mining is now.”
Should Bitcoin repeat historical behavior, price action should copy fundamentals, falling and rebounding once difficulty and hash rate begin to adjust upwards.
Long-term bulls stay confident
Despite the lower levels, traders were happy to zoom out and consider Bitcoin’s overall strength in October.
For Josh Rager, it was the coming weekend that posed the most interest, with the likelihood remaining for BTC/USD to beat its highest-ever monthly close at around $13,880.
“You can’t look at the current monthly chart for Bitcoin without smiling. Open skies overhead for Bitcoin as it’s near to break the all-time high for monthly close at $13,880,” he wrote in a Twitter update.
“If I’m on the outside looking in, this chart is a positive sign with new monthly high potential.”
Bitcoin nonetheless faced multiple external hurdles on Thursday, with the U.S. dollar currency index (DXY) trending markedly up on coronavirus fears to challenge highs from earlier in October. DXY strength traditionally sparks suppression in BTC.
Gold also felt the heat, with the traditional safe haven recrossing the psychologically significant 7 ounce per BTC mark this week.
“You see, gold is breaking down versus bitcoin…and gold investors will flip to BTC,” Real Vision CEO Raoul Pal warned this week.
As Modern Consensus reported, expectations remain for gold to gain from the aftermath of the U.S. elections, regardless of who wins. Bitcoin, meanwhile, is tipped by both Pal and Gemini exchange co-founder Tyler Winklevoss to put in new all-time highs above $20,000 within the next three months.
