Last week’s announcement that payment giant PayPal would support Bitcoin and three altcoins from 2021 continues to have an impact on price action. When the news hit last week, Bitcoin abruptly surged beyond $12,500 to hit highs of $13,200, subsequently reaching $13,370 over the weekend. Reactions among veteran Bitcoiners were mixed, with some warning consumers not to let PayPal hold their cryptocurrency for them, as restrictions are already known to apply.
Nonetheless, consensus remains that Bitcoin has crossed a major adoption hurdle.
At $13,070, Bitcoin sealed its second-highest weekly close since January 2018 on Sunday and its sixth-highest ever. On a technical level, this is no mean feat — BTC/USD has beaten out long-term weekly resistance at $11,900 and also held those higher levels. Retaking and holding $12,000 has been notably absent even from Bitcoin’s most successful periods since the end of its bull market in late 2017, when it reached $20,000.
In both 2019 and earlier in 2020, brief spurts above $12,000 all ended in rejection and a retreat to lower levels on weekly timeframes. This week’s close thus provides another turning point for Bitcoin, and analysts are hopeful that its significance is genuine. Others were more conservative prior to the event, with Cointelegraph Markets analyst Michaël van de Poppe eyeing a short-term pullback.
In a further suggestion that Bitcoin may take a breather in the coming weeks, network fundamentals are showing signs of cooling off after recent growth. According to data from resources including BTC.com and Blockchain, difficulty and hash rate are or will be trending down in the short term. Difficulty, an essential measure of miner activity, is set for a 1.6% decline at the next automatic readjustment in six days’ time. Currently, it is at record highs. Estimated weekly average hash rate, meanwhile, has been sloping downwards from its own highs since Oct. 18. As of Monday, the average is 133 exahashes per second (EH/s), with the record standing at 146 EH/s.
For Bitcoin bulls, however, the old adage that price follows hash rate remains firmly in play.