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Understanding the Current State of Bitcoin
Key Takeaways:
- Significant Expanse in Mining Activity: December 2023 saw Marathon Digital Holdings break records in Bitcoin mining, surpassing Core Scientific's previous achievements.
- Expanding Mining Capacity: Marathon's expansion in computing power and infrastructure underlines a growing industry trend.
- Market Sentiment and Technical Indicators: Despite a bullish sentiment and strong buy signals from moving averages, technical analysis reveals a consolidation phase with potential bearish pressure.
Marathon Digital's Record-Breaking Performance
Marathon Digital Holdings, in a substantial leap, mined 1,853 Bitcoins in December 2023. This 56% rise from November and a 290% increase from the previous year mark an industry milestone. Their computing power grew by 18.4% to 22.4 exahashes per second. The company's goal to reach 50 exahashes in 18-24 months aligns with the broader growth trajectory of the Bitcoin mining sector.
Market Dynamics: Expansion and Competition
The industry's expansion is evident in Marathon's recent acquisition plans and rival Riot Platforms' investment in new mines. These developments coincide with expectations around Bitcoin ETFs and the upcoming Bitcoin halving, both of which could significantly impact the market.
On December 28, Marathon briefly topped the list of the most frequently traded public companies among middle and large market companies on the US Stock Exchange. The company recorded an impressive daily trading volume of $3.3 billion, surpassing market giants such as Tesla, Apple and Amazon.
Technical Analysis: A Closer Look at BTC/USD
The BTC/USD pair is currently in a consolidation phase, with key support at $40,508 and resistance at $44,820. Neutral momentum on the H4 chart and a trend line rejection suggest possible bearish pressure. The intraday indicators show a mixed signal, with 9 out of 21 technical indicators favoring a buy, while the same number suggests a sell, and 5 remain neutral. Interestingly, all 18 moving averages signal a buy.
Weekly Time Frame Analysis: Bullish Prospects
On a weekly chart, Bitcoin exhibits a possible continuation of the current impulsive cycle to the upside.
The Current Trend
Bitcoin has shown a promising pattern on the weekly chart. It has touched the 0.618 Fibonacci retracement level and bounced back, indicating a potential upward momentum. This is a key level watched by traders and its significance cannot be understated.
MA Support
The chart reveals that the 55-week and 100-week moving averages have been significant. Recently, the 55-week moving average has acted as robust support, hinting at a bullish trend continuation.
DMI Insights
The Directional Movement Index (DMI) adds depth to our analysis. With the ADX above 25, it signals a strong trend. Here, the positive trend is reinforced by the +DI's dominance over the -DI.
Elliott Wave Price Projections
An Elliott Wave projection is incorporated, suggesting that Bitcoin is in a powerful third wave. This wave is often the most extensive and dynamic, pointing to the possibility of continued growth.
Conclusions: The overall analysis of this Bitcoin chart indicates a bullish trend with potential for continued upward movement. The next long term technical target for the bulls is set at $48,200 as the potential for a sustained long-term uptrend remains, provided the critical level of $19,572 is not decisively violated. The key long-term technical support is located at the level of $32,829 and $31,790.
Conclusion: Bitcoin's Bullish Picture
In conclusion, the technical analysis of Bitcoin paints a bullish picture, with the potential for continued upward movement. The next long-term target for bulls is set at $48,200, assuming the critical support level of $19,572 remains unbreached.
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Important Notice
The begginers in forex trading need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp market fluctuations due to increased volatility. If you decide to trade during the news release, then always place stop orders to minimize losses.
Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. For successful trading, you need to have a clear trading plan and stay focues and disciplined. Spontaneous trading decision based on the current market situation is an inherently losing strategy for a scalper or daytrader.