Bitcoin (BTC) is in a tight boxing between bulls and bears and the network is now reacting, information shows.

Trackers reveal that this week, Bitcoin difficulty snapped an 18-week green streak to post its showtime subtract since July.

Difficulty adjusts to twenty% BTC price dip

Among cyclical short-term price action, business remains that Bitcoin is not done retracing from its latest $69,000 all-fourth dimension highs.

Having surprised analysts and even rejected one lifelong toll model, BTC/USD over the by month feels like uncharted territory — despite roughly doubling yr to date.

"With Bitcoin now over 20% below the all-time-high, headlines in traditional media have declared that Bitcoin has entered a behave market," on-chain analytics firm Glassnode summarized in its latest weekly newsletter, "The Week On-Chain."

"Notwithstanding, it may surprise some readers that this current market correction is actually the least astringent in 2022. Some might even say business as usual for a Bitcoin HODLer."

Nonetheless, network fundamentals are now taking the latest dip into account. On Dec. 28, difficulty fell one.5% — after rising continually for ix straight periods. The next adjustment is currently slated to produce a further decrease of nearly 2%.

Bitcoin difficulty 7-twenty-four hours average nautical chart. Source: Blockchain

Long-term holder spending sparks "doubt"

Surveying the mural, Glassnode did non rule out further toll declines.

Related: Bitcoin tests traders' nerves as annotator reissues $400K BTC toll forecast

A combination of long-term holder selling, high open interest on derivatives markets and other phenomena could spark a continuation of the downtrend to new local lows.

"Open interest leverage in options and futures at or almost ATHs, which is cause for some business organisation regarding heightened "flush out" potential. Funding rates suggest an simply slightly positive bias, making both a long- or brusque-squeeze plausible scenarios," it concluded.

Regarding LTH beliefs, it added:

"Long-Term Holders have distributed 5.8% of the supply accumulated since March and some uncertainty exists based on their spending patterns."
Long-term holder spent toll annotated chart. Source: Glassnode

Discussing open up involvement, meanwhile, analyst Willy Woo noted that in a post-exchange-traded fund (ETF) environment, activeness may simply remain higher and not necessarily point turbulence on the horizon.

"IMO it doesn't necessarily demand to be flushed," he tweeted.

"It could be a sign of the time with and uptake of the greenbacks and comport trade postal service futures ETFs."

BTC/USD circled $56,000 at the time of writing on Dec. 2 later spending the by 24 hours repeating a run to $59,000 and subsequent rejection.