Bitcoin this week is getting a dose of reality as the World Economic Forum convenes, and analysts still favor a fresh BTC price drop.
Bitcoin (BTC) is off to a better start than most this week at the time of scripting. The bulls avoid serious losses into the weekly close.
While there are no signs of an impending miracle price recovery, some hope that upside will feature before any form of reversion to a downtrend.
Macro conditions remain tenuous, and the week of the World Economic Forum’s (WEF) Annual Meeting is due to add fuel to the fire surrounding the tolerance of Bitcoin.
Add to that the largest downward difficulty adjustment since last July, and it becomes clearer that Bitcoin is battling for strength on multiple fronts.
What could happen in the coming days? Cointelegraph presents several factors to consider concerning BTC price action.
Difficulty reflects conditions catching up with miners
Major Bitcoin price drawdowns are not without their consequences.
According to the latest estimates, Bitcoin’s network fundamentals are now due to adjusting for the trip to $30,000.
The difficulty, which reflects changing dynamics among miners, will reduce by around 3.3% at its next automated readjustment this week. While modest compared to some adjustments, the change will nonetheless be the largest downward shift since July 2021.
The reason is simple — Bitcoin price action has not only headed south but is challenging miners’ profitability.
Miner production cost is key in determining their ongoing activity. A decline below the number, currently at around $26,000. It would cause larger shifts in network fundamentals to maintain profitable participation.
According to monitoring resource MacroMicro, as of May 21, it cost an average of $26,250 to mine one Bitcoin.
Read More: Review of Bitcoin USD through Chart Analysis
