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| Everything you need to make sense of the crypto markets and beyond By the CoinDesk Markets Team Edited by Lawrence Lewitinn, Managing Editor, Global Capital Markets July 19, 2021 Sponsored by Bitcoin (BTC) -1.0% $31,414 Ether (ETH) -4.6% $1,872 (Price data as of July 19 @11:15 UTC) If you were forwarded this newsletter and would like to receive it, sign up here.
Good morning, and welcome to First Mover. Here's what's happening this morning: Market Moves: Bitcoin Network Sees Fourth Straight Downward Difficulty Adjustment"The last four adjustments have been downward, and it now looks like the blockchain is back to normal," one analyst said. Technician's Take: Bitcoin Trending Lower With Possible Break of $30K Support Bitcoin sellers are in control and could break $30K support. And check out the CoinDesk TV show "First Mover," hosted by Christine Lee, Emily Parker and me at 9:00 a.m. U.S. Eastern time. Today the show will feature guests: Michael Sonnenshein, Grayscale CEO Brad Yasar, EQIFI CEO Matthew Le Merle, Fifth Era Co-Founder & Managing Partner– Lawrence Lewitinn
Biggest Movers These are the biggest movers in the CoinDesk 20 over the past 24 hours:
Gainers: None of the CoinDesk 20 digital assets is up today.Losers: Aave (AAVE): -7.1%The Graph (GRT): -6.4% Polkadot (DOT): -5.6% Stellar (XLM): -4.3%The CoinDesk 20 are 20 digital assets filtered from the larger universe of thousands of cryptocurrencies and constitute roughly 99% of the market by volume at eight of the largest and most trustworthy exchanges.
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Market Moves by Omkar Godbole Bitcoin Network Sees Fourth Straight Downward Difficulty Adjustment Bitcoin’s mining difficulty, a metric indicating the effort required to solve the complex cryptographic puzzle to mine blocks and validate transactions, recorded its fourth straight drop over the weekend.
On Sunday, difficulty fell by 4.8% at block 691,488, having declined by a record 28% on July 3, according to data tracked by BTC.com. The difficulty rate now stands at an 18-month low of 13.67 trillion. That’s down 45% from the mid-May peak of 25.05 trillion. Bitcoin mining difficulty: Fourth consecuive decline (Source: Colin Wu) According to The Block, the network last recorded four consecutive declines in difficulty in 2011.
The bitcoin mining difficulty undergoes automatic adjustment every 2,016 blocks, or roughly every two weeks, to maintain a target block time of 10 minutes. The reward for mining blocks and approving transactions is currently 6.25 BTC.
The time taken to mine new blocks rises when there is a drop in the amount of computing power applied to the blockchain. At that point, the programmed code kicks pushes the difficulty lower to attract more miners and restore the average block time to 10 minutes.
“Since May, the blockchain has been running slowly. Earlier this month, the average block time reached 1,000 seconds, when they ought to average around 600 seconds.” Charlie Morris, chief investment officer at ByteTree Asset Management, said.
“To rectify that, the blockchain needed to speed up and make mining easier. The last four adjustments have been downward, and it now looks like the blockchain is back to normal,” Morris said.
The self-adjusting mechanism makes bitcoin mining somewhat analogous to perfect competition, a hypothetical market structure where forces of demand and supply interact freely and firms’ decisions are predictable.
The difficulty rate peaked at over 25 trillion in the second half of May and has been falling ever since amid China’s crackdown on cryptocurrency mining. The mean hashrate peaked along with the price in mid-April and hit a two-year low of 61.22 exahashes per second (EH/s) in late June. Since then, it has recovered slightly to 96 EH/s, according to Glassnode data. Bitcoin: Mean hash rate and price (Source: Glassnode) The dramatic decline in both the hashrate and difficulty could be a short-term phenomenon, as there is evidence that China-based miners shifting to the U.S. and Kazakhstan could soon become operational.
“This is a one-off event, meaning most of this mining power will return, and before you know it, MORE than 900 coins per day will be mined since the hash rate will hit the network after the difficulty of each block decreases,” Ben Lilly, a crypto economist at Jarvis Labs, noted in a Substack post published last month.
The drop in the mining difficulty has not had any bearish effect on the cryptocurrency’s price, leaving it directionless in existing ranges. Social media chatter shows some traders are worried about a deeper drop as prices ended Sunday (UTC) below $34,000, marking the lowest weekly close of the year. At press time, bitcoin is changing hands near $31,300. Read the original story here: Bitcoin Network Sees Fourth Straight Downward Difficulty Adjustment
The CoinDesk Quarterly Review 2021 Q2
Most CoinDesk 20 assets, which constitute 99% of the crypto market by verifiable volume, ended the quarter with negative returns. Meanwhile, protocol development for the world's largest cryptocurrencies by market capitalization, Bitcoin and Ethereum, reached new milestones. CoinDesk Research's latest Quarterly Review dives into the trends, developments and technological progress that shaped the crypto markets from April to June 2021. The full report is now available from the CoinDesk Research Hub.
Technician's Take by Damanick Dantes, CMT Bitcoin Trending Lower With Possible Break of $30K Support Bitcoin (BTC) is stuck in a month-long downtrend as traders experienced choppy conditions over the past few days. A break below $30,000 is likely given the loss of upside momentum and strong resistance on the charts.
The cryptocurrency was trading around $31,000 at press time and is down about 5% over the past week. Bitcoin four-hour price chart shows short-term support and resistance levels with RSI (Source: TradingView) The 50-period moving average on the four-hour chart is sloping downwards, which indicates a declining trend over the past month.Immediate resistance is seen around $32,000 and $34,000, which could limit upside if buyers return at support. The relative strength index (RSI) is not yet oversold on the four-hour and daily charts. This means sellers are in control as buyers await lower support levels. If $30,000 is broken, the next level of support is seen around $27,000, which is a 60% retracement from the March 2020 price low. Bitcoin’s current sideways trading is similar to the June-November 2018 range between $5,900 and $7,400, which preceded further selling as the bear market advanced.
Read the original story here: Bitcoin Trending Lower With Possible Break of $30K Support
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BOLO Be on the look out for some of these upcoming events: No major data releases today.
The cryptocurrency movement has never been so sprawling, reaching every corner of the planet. Crypto State by CoinDesk aims to connect with local communities to explore this movement of financial disruption and how it trickles down to every corner of the globe, from DeFi investment opportunities to alternative ways to transact and store wealth. We're making virtual stops with audiences in Nigeria, the Middle East and Southeast Asia this year. Register for the Crypto State virtual tour.
ICYMI In case you missed it, here are the most recent episodes of "First Mover" on CoinDesk TV:
Former Chairman of the Commodity Futures Trading Commission Timothy Massad joins "First Mover" to shed light on where U.S. regulators stand on crypto regulations and when American investors can see the first bitcoin ETF in the country, and eToro's global macro strategist Ben Laidler on bitcoin price outlook.
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Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. ATTENTION: Scammers have been sending fraudulent emails with links to sites disguised to look like coindesk.com. If you are in doubt about a link, type https://www.coindesk.com directly into your browser; do not copy and paste. Remember, if something seems too good to be true, it probably is.
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