The crash of crypto markets deepened, sending Bitcoin to new lows around $8,500. Now, either a rebounce or a further slide is expected, as some see the $8,000 level as significant in preventing or causing a panic sell.
If we break below $8k on Bitcoin, we will then head into panic mode...even though we’re *only* up 800% in a year! Welcome to the world of greed & fear, with market cycles that don’t always go up, ad infinitum...
At the same time, others are seeing similarities between the fast rise, brief peak and slide in Bitcoin, which is starting to resemble the price movement at the end of 2013. After that, the crypto world saw two years of stagnation before the last quarter of 2017 saw all coins peak to unbelievable heights.
But the new year arrived with several shakedowns, happening roughly every week, which wiped out most of the gains. Bitcoin has retraced most of the gains.
One of the immediate causes of Bitcoin's drop and an apparent slide in confidence was the matter of Tethers, or the USDT stable tokens. After the Bitfinex exchange got subpoenaed in December, the Tether minting wallet became unusually active, issuing hundreds of millions of USDT tokens within days.
By still unknown mechanisms, each issue of tokens coincided with a fast spike in Bitcoin's price, as experts suspected malicious trading behavior, or spoof orders.
But this time, the slide in Bitcoin has not triggered any new Tether issues, quite the reverse - at the end of January, 30 million's worth of Tethers was burned in the minting wallet.
The State of Bitcoin
The Bitcoin hash rate has continued to rise, despite some fluctuations, and is now more than 21 PH/s, as more mining farms come online.
The mempool, surprisingly, has slid to around 32,000 unconfirmed transactions, much lower compared to the rush to Bitcoin in peak prices.
There are still experimental Lightning Network nodes, which are multiplying by the day, but it remains to be seen how usable those would be in everyday Bitcoin transactions.
Curiously, the Bitcoin network may be in a much better condition today, compared to the asset at peak prices. And yet the trading logic is entirely different. At the same time, Bitcoin's dominance over the market in terms of price has grown a bit, to 35.5% from around 33% in the past weeks.