The reason why you saw that a decrease in difficulty resulted in a decrease in price is most likely due to the fact that the difficulty decreased because BTC was trending downwards, and 2 weeks later the trend continued. Like everybody said here, difficulty follows price most of the time.
Prices goes up... so does difficulty
Prices stays the same... difficulty goes up anyways
Prices go down... difficulty usually stays constant or goes down.
This is in the macro scale of things. Hence its a lagging indicator and won't help you make any money since it already happened.
Topic: Bitcoin Difficulty & Price prediction - page 2. (Read 383 times)
What I would like to say is that the decrease in difficulty gives us an indication that the price may fall in the next two weeks.
saying this is like me looking out my window and after seeing the streets are wet make the conclusion that it is going to rain in a couple of hours! (it is actually raining right now
)think about it this way, when you want to buy bitcoin (or as a trader place a buy/sell order) you are not looking at the difficulty to see how much it is to make a decision. instead you look at the "price charts" and place your orders. similarly a miner doesn't look at the difficulty, they look at price and decide whether to shut down, continue mining, hold their bitcoin or sell it or even buy new ASIC and mine bitcoin with it.
all working in the opposite direction of what you said here. price goes up and down and difficulty follows afterwards.
Well, first of all that $7k to $8.4k is a HUGE difference, if you are going to bet your money on falling I would understand it, you do not have to give any numbers neither, just say that price will fall and that is a good enough prediction, giving that wiiiide difference is weird. However about the drop, you have checked the previous difficulty changes when there was no halving at all, there was nothing that extra ordinary that could affect bitcoin, the march one is bigger because there was pandemic and had very little with difficulty neither.
I am not saying that difficult doesn't cause it to drop, all I am saying is there is this time is a bit different and that is why I think the results could vary this time around as well, just like the big fall because of pandemic at march compared to falls of before, this could be increase as well.
I am not saying that difficult doesn't cause it to drop, all I am saying is there is this time is a bit different and that is why I think the results could vary this time around as well, just like the big fall because of pandemic at march compared to falls of before, this could be increase as well.
What is the relationship between complexity and price? I see only statistical, but it is meaningless.
I understand the relationship between price and, for example, the amount of electricity burned to operate a network. Here are obvious relationships. But an indicator of the complexity of the network, looking at which we cannot see the launch of new, more efficient mining equipment, cannot be an indicator that should be paid attention to.
I understand the relationship between price and, for example, the amount of electricity burned to operate a network. Here are obvious relationships. But an indicator of the complexity of the network, looking at which we cannot see the launch of new, more efficient mining equipment, cannot be an indicator that should be paid attention to.
Date Difficulty Change Price Change
- 2020-03-26 04:51:46 13,912,524,048,945 - 13.91 T - 15.95 % From 6700 to 5900 (4 Days)
- 2020-02-25 10:28:42 15,486,913,440,292 - 15.49 T - 0.38 % From 9600 to 8500 (6 Days)
- 2019-12-05 22:02:25 12,876,842,089,682 - 12.88 T - 0.74 % From 7200 to 6500 (13 Days)
- 2019-11-08 01:30:36 12,720,005,267,390 - 12.72 T - 7.10 % From 9200 to 8047 (Next Dif)
What I would like to say is that the decrease in difficulty gives us an indication that the price may fall in the next two weeks.
- 2020-03-26 04:51:46 13,912,524,048,945 - 13.91 T - 15.95 % From 6700 to 5900 (4 Days)
- 2020-02-25 10:28:42 15,486,913,440,292 - 15.49 T - 0.38 % From 9600 to 8500 (6 Days)
- 2019-12-05 22:02:25 12,876,842,089,682 - 12.88 T - 0.74 % From 7200 to 6500 (13 Days)
- 2019-11-08 01:30:36 12,720,005,267,390 - 12.72 T - 7.10 % From 9200 to 8047 (Next Dif)
What I would like to say is that the decrease in difficulty gives us an indication that the price may fall in the next two weeks.
Interesting observation. There is obviously some relationship between difficulty drops and downtrends but it's not as easy to trade as you think. For example the 3/26 difficulty drop did precede a drop in price, but it was only a small and short-lived correction in a much bigger multi-month bull trend.
It also may be significant that none of the above difficulty drops occurred after reward halvings. Those examples may not accurately characterize the hash rate dynamics we see today.
reportedly 1.3 million miners have been turned off, I do not know this news is true or not,
if true, then this might make Bitcoin a dump, I know if someone new to mine in bitcoin then it is now in vain,
because the price must above $ 14,000 to make miners profitable
It is a tradition that old ASICs need to plug out instead of making negative profits. Here ASICs are getting old based on its profitability. So, the recent reward-drop made lots of miners old just after the day of halving. The entire mining industry needs to cope with new block-rewards and profitability, definitely it will take some time; because, out of competition some miners may even continue with negative profits with the expectation of reaching profits with future prices rather than opting to quit. Small miners are the first ones to quit or switch over to higher hash power. So, it will take time that bitcoin mining to get back to profitable after halving.if true, then this might make Bitcoin a dump, I know if someone new to mine in bitcoin then it is now in vain,
because the price must above $ 14,000 to make miners profitable
For the same reason, bitcoin prices do find a dump immediately followed by the halving but this time bitcoin markets managed to sustain at same levels to slight higher prices probably thanks to 100x more transaction fees. Usually higher transaction fees lead to bull markets. This way, when bitcoin markets remain in bullish mode, we can expect mining difficulty to increase.
What I would like to say is that the decrease in difficulty gives us an indication that the price may fall in the next two weeks.
I think you got it backwards. Lower price may cause a drop in difficulty if the price becomes too low for some miners to continue mining. In theory higher difficulty may cause the price to drop a little bit as miners need to sell more bitcoins to pay their bills. However the total amount of new bitcoins being mined and sold by miners isn't that large compared to overall trading volumes, ~1800 per day.
if true, then this might make Bitcoin a dump, I know if someone new to mine in bitcoin then it is now in vain,
because the price must above $ 14,000 to make miners profitable
What I would like to say is that the decrease in difficulty gives us an indication that the price may fall in the next two weeks.
I think you got it backwards. Lower price may cause a drop in difficulty if the price becomes too low for some miners to continue mining. In theory higher difficulty may cause the price to drop a little bit as miners need to sell more bitcoins to pay their bills. However the total amount of new bitcoins being mined and sold by miners isn't that large compared to overall trading volumes, ~1800 per day.
Key question here is:
Is there any fundamental, economic reason for price to fallow difficulty?
Answer is:
NO
Difficulty fallows price and moor law (increase of hardware efficiency) not price fallow difficulty. This is a mistake that is repeated in many sources for unknown reasons. Just stop repeat it and let it die.
Is there any fundamental, economic reason for price to fallow difficulty?
Answer is:
NO
Difficulty fallows price and moor law (increase of hardware efficiency) not price fallow difficulty. This is a mistake that is repeated in many sources for unknown reasons. Just stop repeat it and let it die.
I have read some of the comments linking prices with the difficulty and did a quick research in an attempt to predict price behavior in the coming days and this was the result:
Date Difficulty Change Price Change
- 2020-03-26 04:51:46 13,912,524,048,945 - 13.91 T - 15.95 % From 6700 to 5900 (4 Days)
- 2020-02-25 10:28:42 15,486,913,440,292 - 15.49 T - 0.38 % From 9600 to 8500 (6 Days)
- 2019-12-05 22:02:25 12,876,842,089,682 - 12.88 T - 0.74 % From 7200 to 6500 (13 Days)
- 2019-11-08 01:30:36 12,720,005,267,390 - 12.72 T - 7.10 % From 9200 to 8047 (Next Dif)
Sources:
- https://coinmarketcap.com/currencies/bitcoin/
- https://btc.com/stats/diff
What I would like to say is that the decrease in difficulty gives us an indication that the price may fall in the next two weeks.
The current difficulty is at 16,104,807,485,529.00[1] and it is expected to decrease in the next change by about -3.86%[2], so I expect to notice a decrease in the price between the date of 19 May to the first of June.
I may bet on levels of $ 7000 to $ 8,400.
[1] https://www.coinwarz.com/mining/bitcoin/difficulty-chart
[2] https://diff.cryptothis.com/
Date Difficulty Change Price Change
- 2020-03-26 04:51:46 13,912,524,048,945 - 13.91 T - 15.95 % From 6700 to 5900 (4 Days)
- 2020-02-25 10:28:42 15,486,913,440,292 - 15.49 T - 0.38 % From 9600 to 8500 (6 Days)
- 2019-12-05 22:02:25 12,876,842,089,682 - 12.88 T - 0.74 % From 7200 to 6500 (13 Days)
- 2019-11-08 01:30:36 12,720,005,267,390 - 12.72 T - 7.10 % From 9200 to 8047 (Next Dif)
Sources:
- https://coinmarketcap.com/currencies/bitcoin/
- https://btc.com/stats/diff
What I would like to say is that the decrease in difficulty gives us an indication that the price may fall in the next two weeks.
The current difficulty is at 16,104,807,485,529.00[1] and it is expected to decrease in the next change by about -3.86%[2], so I expect to notice a decrease in the price between the date of 19 May to the first of June.
I may bet on levels of $ 7000 to $ 8,400.
[1] https://www.coinwarz.com/mining/bitcoin/difficulty-chart
[2] https://diff.cryptothis.com/
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