Bitcoin remained in the same place on Monday. The activity of the cryptocurrency market has noticeably dropped in recent weeks, and the world's first cryptocurrency has been around the level of $41,515 for a very long time. We cannot say if a horizontal section of the trend is being formed now, but the market is clearly in chaos. Contradictions are tearing apart cryptocurrency investors – on the one hand, there is strong support at $41,515, and many long-term and institutional investors buy Bitcoin on it, and on the other, the news background remains very difficult for the cryptocurrency and clearly does not indicate a new upward rally. The wave from the downward trend can be considered complete, as it may turn out to be shortened. However, it is still believed that it will take a clear five-wave form. If this assumption is correct, then the quotes of the instrument should continue to fall. For this to occur, it is necessary to break through the level of $ 41,515.
- Bitcoin's share in cryptocurrency payments is falling
Last year, Bitcoin owners coins were less likely to use them for settlement than a year earlier. The volume of cryptocurrency transactions in this digital asset has decreased and now accounts for about 65% of the total number of transactions. In 2020, this figure was 92%. Despite the fact that this indicator has seriously decreased, Bitcoin is still sharply leading, and the closest pursuer, Ethereum, has a share of only 15%. All other cryptocurrencies have an even smaller share. Analysts report that investors are increasingly choosing alternative cryptocurrencies and stablecoins, as the former have greater growth potential, while the latter are less volatile. Is the era of Bitcoin starting to end?
Bitcoin's current cost is $34,000
Analysts have calculated that given the current complexity of coin mining and the total computing power, the price of mining one bitcoin coin is now equal to $ 34,000. Computing power is constantly growing, and technology companies are releasing new models of miners. Therefore, the rising total computing power leads to the difficulty of mining a single coin and higher costs for equipment and electricity due to high competition in the industry.
In addition, "hard forks" reduce the miner's premium for the mined block, and the next "hard fork" is scheduled for 2024. This means that miners' premium will be halved. And in order to keep the coin mining profitable, the cryptocurrency needs new growth and stabilization in a new price range, much higher than the current one. It is also reported that with the fall in the profitability of production, the chances for new growth of the cryptocurrency increase, as miners increasingly do not sell coins at the current value, expecting its increase. However, it is not recommended to consider the demand for Bitcoin as a value that cannot decrease or is constantly growing. No matter what the supply, if the demand decreases, then the rate of the cryptocurrency will also decrease. The downward trend scenario still continues.
A new downward trend section continues to form. At this time, wave b is considered completed, which has taken a noticeable three-wave form. The instrument declined to the previous low, around $ 41,500, in the expected wave c, and broke through it. The downward trend may end around this level, but such a shortened third wave is still rare. The instrument can be expected below this mark. The news background is not on Bitcoin's side right now, so the expectations of a strong wave c are not unreasonable. A successful attempt to break the low of wave a, as well as the level of $ 41,515, which equates to 38.2% Fibonacci, is very important. In this case, the decline may resume around the targets levels of $ 37,552 and $ 34,322, which equates to 23.6% and 50.0% Fibonacci.
