BTC/USD Price Analysis – May 31, 2023

Daily Price Outlook

Today’s Bitcoin price stands at $27,117, with a trading volume of $15,859,928,095 in the last 24 hours. The view of Bitcoin mining as a heavily energy-consuming operation is set to change, along with the narrative that accompanies it. Bitcoin is on the path to achieving carbon neutrality as eco-friendly mining practices emerge and awareness increases.

Research indicates that greenhouse gas emissions from global Bitcoin mining have seen more than a 50% reduction over the past three years. In May 2020, Bitcoin mining resulted in emissions of 601 g/KWh, which decreased to 299 g/KWh by May 2023. The term “g/KWh” refers to the grams of CO2 emissions produced per kilowatt-hour of electricity. Lower g/KWh figures indicate cleaner energy production and reduced carbon emissions.

Furthermore, Bitcoin mining is nearing carbon neutrality and might even reach a point of being net carbon negative if current trends continue. Few blockchains, including Polygon and Solana, have achieved this in the past.

If Bitcoin accomplishes this, it will debunk the persistent misconception that “Bitcoin mining excessively consumes energy and harms the environment”. This notion was the main driver behind Elon Musk’s decision to halt Bitcoin payments at Tesla, triggering a market crash in May 2021.

A legislative effort in Texas aimed at limiting the participation of Bitcoin miners in industries that help conserve grid costs failed to advance past a committee in the state House of Representatives earlier this week.

The program incentivizes miners to halt their operations whenever there’s a surge in power grid demand. The proposed bill would have ceased these tax incentives while restricting miner involvement to a mere 10%.

Bitcoin miners are currently rebuilding their reserves after a sharp decrease that started in May last year and continued throughout 2022. The miners are utilizing a portion of their remaining assets to sustain their operations. Over the last month and a half, miners have sold approximately $5 billion worth of Bitcoin from their reserves to support their mining activities.

Despite experiencing losses and uncertain future profits from Bitcoin prices, the persistent increase in hash rate suggests that miners are continuing to run their equipment. They remain hopeful for potential future rewards, a wait that might take some time.

BTC/USD Price Chart – Source: Tradingview

BTC/USD – Technical Outlook

Bitcoin is currently facing significant selling pressure after breaking below the important $27,500 threshold, which previously served as a strong support for the cryptocurrency. The four-hour chart demonstrates not just a break of the 50% Fibonacci retracement level, but also a breach of the Alpha trend line, which further strengthens the bearish sentiment.

The appearance of a bearish engulfing candlestick pattern further solidifies the ongoing downward trend. Bitcoin has already reached the 61.8% Fibonacci retracement level at $27,250 and seems to be heading towards the next critical support at the 78.6% Fibonacci level, roughly around $26,950.

A successful rise above the $27,950 mark could potentially push Bitcoin’s price toward the next support zone at $26,500. A decisive break above the crucial level of $26,500 is likely to spark a bullish rally for Bitcoin’s price.

On the upside, we expect a resurgence of the previously breached resistance level around $27,300, followed by the next resistance at $27,500. Furthermore, if the positive trend continues, Bitcoin could potentially challenge the next resistance level at $28,000.

In conclusion, careful observation of the $27,500 level is vital as it acts as a key support zone, while also staying alert for potential rebound opportunities around the $26,500 level for Bitcoin.