The crypto market has seen significant losses, with Bitcoin and Ethereum declining, while mining difficulty has sharply increased by 14%.
The cryptocurrency market has faced significant downturns, with Bitcoin and Ethereum both seeing declines and mining difficulty increasing sharply by 14%. This week, the Ethereum Foundation also unveiled a comprehensive roadmap for the blockchain's future development.
Market Declines
Digital assets are struggling, with Bitcoin dropping approximately 4% over the past week and 25% in the last month. After trading around $70,000 on Monday, Bitcoin fell to a local low of $65,000 by Thursday, before slightly recovering to $67,000 by Sunday.
Ethereum mirrored Bitcoin's struggles, unable to maintain the critical $2,000 threshold, and experienced a 5.5% decline in the same timeframe. Analysts from Glassnode noted that Bitcoin’s drop to around $60,000 has created psychological pressure on long-term holders, reminiscent of the Terra ecosystem's collapse in May 2022.
Data indicated that the seven-day exponential moving average of the Spent Output Profit Ratio (SOPR) for long-term investors fell below 1, suggesting a shift towards selling positions at losses, a behavior typically seen in prolonged bear markets. Additionally, trading platforms have observed a decrease in inflows, prompting many professional investors to pivot to liquid assets or increase cash reserves, as evidenced by continued outflows from U.S. Bitcoin ETFs for five consecutive weeks.
Technical analysts have identified a bearish pennant formation on Bitcoin and Ethereum charts, predicting potential targets of $55,000 and $1,100, respectively, should prices break below this pattern. Most other top cryptocurrencies also reflected negative trends, with the exception of TRX, which gained 3%. The Crypto Fear and Greed Index remains low at 9 points, while total market capitalization has plateaued at $2.45 trillion.
Mining Difficulty Increases
On February 19, Bitcoin's mining difficulty surged by 14.73% to 144.4 trillion hashes, marking one of the largest adjustments since 2021. This followed an 11% drop in the previous recalculation due to severe weather disrupting operations for many miners.
Despite the current hash rate exceeding 1 ZH/s, the profitability of mining continues to decline, with hash prices falling from $34 to $28 per petahash per second over the past week. Nevertheless, miners with access to inexpensive energy sources are expanding operations; for instance, unrealized profits from Bitcoin mining in the UAE reached $350 million. However, Bitdeer, a mining firm, has opted to sell all Bitcoin on its balance sheet, releasing 943.1 BTC onto the market last week.
In a notable shift, Bitdeer has now surpassed Marathon Digital Holdings in hash rate, establishing itself as a leader among public miners, while also acquiring a 64% stake in AI infrastructure provider Exaion, highlighting a trend of diversification within the mining sector.
Ethereum Development Plans
The Ethereum Foundation has outlined its roadmap through 2026, focusing on scaling, user experience improvements, and securing the base layer. Key objectives include increasing Layer 1 throughput, preparing for the upcoming Glamsterdam hard fork, and optimizing storage solutions. Additionally, enhancements in user experience aim to promote native account abstraction and interoperability across networks.
Currently, Ethereum's staking share has reached a historic high of 50.18%, with approximately 37.1 million ETH locked in the mainnet, representing 30.54% of the circulating supply. The total number of active validators stands at nearly 965,000, reflecting robust participation in the network's proof-of-stake system.
Crypto Payments in Belarus
In a significant regulatory update, the chairman of the National Bank of Belarus, Alexander Egorov, announced that self-employed individuals will now be able to receive payments for services in cryptocurrency, eliminating previous legal ambiguities regarding crypto transactions. This change allows payments to be processed through newly legalized crypto banks, which will facilitate conversions to the Belarusian ruble for everyday transactions.
"Blockchain technology, combined with state regulation, provides a level of transparency that ordinary banks can only dream of," Egorov stated.
