Prominent market analyst Sminston With shares data showing that Bitcoin is now at a pivotal decision point following a price rally last week. The premier cryptocurrency commenced April on a bullish note, recording a seven-day gain of about 10%, according to CoinMarketCap data.
This price surge amid an extended bear market has triggered certain market dynamics that could lead to a deep retrace if the current rally proves unsustainable.
Bitcoin Touches CoP Floor – What Comes Next?Meanwhile, Cost of Production, as the name implies, is the average cost miners incur to produce 1 BTC. It includes factors such as electricity, hardware, and other operational costs. When the price falls below the CoP, miners become largely unprofitable, leading to operational shutdowns.
Today's Bitcoin price sits right at, or just barely below, the Power Law estimate of the current cost of production (CoP) floor: $73,234
With Bitcoin now trading around the (CoP), it is said to be at its fair value, i.e., a balance that is neither cheap nor expensive. If Bitcoin were to lose this structural support level, the Power Law chart indicates a steep correction will follow. In this regard, the 1st quantile PL floor lies around $60,000. This would represent a normal correction floor market, driven by weak hands’ exits and steady accumulation by strong hands and long-term holders.
In a worst-case scenario where the price fails to hold above this level, it could fall to the lower CoP estimate of $53,000. This is a deep market stress territory accompanied by macro shocks and panic selling among investors. It could also represent another key accumulation zone for long-term holders.
Bitcoin Hash Rate Settles Around 873.19 EH/sAt press time, the premier cryptocurrency trades at $72,709, reflecting weekly and monthly gains of 9.03% and 4.13%, respectively.
