Bitcoin had a positive difficulty adjustment of 8.9% yesterday but remained 4.4% from its all-time high, much like its price.
Last week, the BTC price was 2.5% away from the peak when it made nearly 17% pullback to $16,300. It was still one of the tamest bull market retracements, and soon after, just over the weekend, BTC hit $18,700 yet again.
Any dips in the current market are being scooped extremely fast, which makes sense given that above ATH is where the price discovery will start this time. Additionally, as quant trader Qiao Wang notes,
“Buying BTC today at $18k is better risk reward than buying BTC back in March at $4k.”
This is because, in March, a massive fall could have set the store of value narrative back by a few years, and the market had no idea just how much monetary and fiscal intervention was coming.
Today, the inflation narrative is spreading like wildfire, and the household macro traders and corporations are feeling the FOMO and rushing in.
“The more expensive, the more salable, the more valuable,” said Wang.
Three benchmarks of #bitcoin institutional adoption flashed 🟢 in November
Seeing volume surges on CME bitcoin futures pic.twitter.com/meeovKT9ZP
— skew (@skewdotcom) November 30, 2020
Bitcoin is winning it
Today, we are back on the move going as high as $19,500, now just about 5% off the ATH on the back of strong fundamentals. Jason Deane, an analyst at Quantum Economics, said,
“Yesterday’s Bitcoin difficulty adjustment was quite chunky at +8.87%, but still well below ATH in late Oct. Surprised actually – price has moved up by 42% since then, reports of large scale mining purchases streaming in, but diff only creeping up at the mo.”
The difficulty has been increased in response to the hash rate of the network is near its peak, set in late October. Computing power devoted to running the largest network has been soaring for the past two years.
According to Samson Mow of Blockstream, there has actually been a shortage of Bitcoin miners. One miner said,
“There’s a shortage of Bitcoin miners right now. Manufacturers are having trouble getting additional chip capacity from foundries, and deliveries are pushed out to late Q2/Q3 2021. “又开始疯了” which translate to “It’s getting crazy again.”
When it comes to other facets of the network, the backlog is all cleared in the mempool, which collapsed when the price was this high in late 2017.
Just the same as the mempool, the average bitcoin transaction fee remains extremely low at under $3, which was above $55 at the peak of the 2017 bull market.
Amidst this, the number of Bitcoin users continues to grow, with more than 30 million wallet addresses with active balances.
Not to mention all the attention BTC gets from institutional investors, family offices, companies, celebrities, and others. Historian Niall Ferguson tweeted on Sunday,
“We are living through a monetary revolution so multifaceted that few of us comprehend its full extent. And Bitcoin is winning it.”