After the wreckage of September, Bitcoin [BTC] finally breached the coveted level of $50K in four weeks. With the latest feat, the crypto-asset amassed daily gains of over 6%. The rally above the crucial psychological threshold comes amidst many altcoins losing value against the king coin lately. The initial rally was perhaps driven by the United States Fed Chairman Jerome Powell, who revealed that they have no intentions of banning cryptocurrency assets.
As a result, Bitcoin’s market dominance tumbled down from nearly 70% to a low of 39.9% in a span of five months. The figures took another damaging turn in the second week of September. However, as price recovered, Bitcoin’s dominance in the market also noted an uptick. At the time of writing, it stood at 43%.
Bitcoin’s [BTC] return to profitability
Bitcoin strongly climbed out of a zone of heavy accumulation. Almost every day, its capital inflows are being observed to be around $1.75 billion. This can also be attributed to the network’s hash-power which has been on a steady path to recovery even after the BTC mining industry faced the most dramatic short-term disruption in all history. Throughout May, 50% of the hash rate went offline. Even after the massive effect on its industrial base, the hash rate has been on a consistent path to recovery every since.
The network mining difficulty has increased by 39% after crashing in late July. According to Glassnode’s latest weekly report, mining difficulty has now bounced back to the last 2020 levels. Furthermore, an additional adjustment to the upwards of approximately 3.9% is expected to happen this week.
The blockchain intelligence company also noted,
“The Difficulty ribbon is also about to flip over and signal full recovery, as the slowest 200-day moving average crosses over the fastest 9-day moving average. The only comparable difficulty ribbon flip to the current market was following the December 2018 bear market capitulation event that took prices down 50% to $3k.”
To put things into perspective, the mining recovery during 2018-19 took a total of 164-days to completely switch the bearish difficulty ribbon signal. On the other hand, the current market has been in a recovery mode for 120-days. Glassnode further speculated that it is likely to reverse completely after the next upwards difficulty adjustment.