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Here’s the Key Support Bitcoin Must Defend to Avoid Serious Downside

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  • Bitcoin has been struggling to garner any clear upwards momentum throughout the past several weeks
  • This has degraded its technical strength, resulting in it seeing heightened selling pressure
  • Analysts are growing somewhat cautious about the crypto’s near-term outlook
  • Nonetheless, it is essential to note that it remains above multiple crucial levels
  • As such, until these support levels throughout the lower-$11,000 region are broken, BTC may still be well-positioned to see further upside

Bitcoin and the aggregated cryptocurrency market saw a sharp decline today that came about after BTC plunged to its near-term support level at $11,400.

This decline occurred following a period of strength seen over the past couple of days, during which time BTC attempted to shatter the heavy resistance sitting at $12,000.

Bitcoin’s continued inability to break through this resistance region seems to point to significant underlying weakness, potentially revealing that bulls are growing weaker by the day.

Traders are now noting that the benchmark cryptocurrency is likely to see some sideways trading in the near-term due to the massive support between $11,200 and $11,400.

Bitcoin Approaches Key Support Region as Technical Weakness Mounts 

At the time of writing, Bitcoin is trading down over 3% at its current price of $11,400. This marks a notable decline from daily highs of nearly $11,800 that were set yesterday.

Because bulls have not been able to break above $12,000 following the decline beneath this level, it will likely continue acting as crucial resistance in the days, weeks, and possibly even months ahead.

One popular crypto analyst is now pointing to a range between $10,900 and $12,370, noting that which of these boundaries is broken first should reveal that crypto’s mid-term trend.

“There’s the range to watch – I expect more sideways with altcoins to continue to make moves. CME Gap meme continues to be unexplored – but doesn’t have to fill. But expect some nice downwards wicks to come – even though any daily close above $10,500 remains bullish,” he said.

Image Courtesy of Josh Rager. Chart via TradingView.

Here are the Key Support Levels Bulls Must Defend to Guard Against a Dip to $10,000

Another analyst explained that he is closely watching to see if bulls can defend the region between $11,200 and $11,400.

He notes that a break below this level could send Bitcoin straight down to $10,000.

“$11,200-11,400 is a must-hold area. If we lose that zone, I think we’ll be going towards $10,000. Break and flip $12,000 -> new highs.”

Image Courtesy of Crypto Michaël. Chart via TradingView.

Because the selling pressure currently being placed on Bitcoin is starting to ramp up, investors may soon gain insight into the state of its mid-term uptrend.

Featured image from Unsplash.
Charts from TradingView.





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China’s attempt to kill Bitcoin failed — Here are 3 reasons why

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Bitcoin (BTC) might have suffered its largest coordinated attack over the last couple of months, but in this instance, the investor community did not capitulate. China outright banning mining in most regions after giving BTC miners a two-week notice and this caused the single largest mining difficulty adjustment after the network hash rate dropped 50%.

The market sentiment surrounding Bitcoin was already damaged after Elon Musk announced that Tesla would no longer accept Bitcoin payments due to the environmental impact of the mining process. It remains unknown whether China’s decision was influenced or related to Musk’s remarks, but undoubtedly those events held a negative effect.

A couple of weeks later, on June 16, China blocked cryptocurrency exchanges from web search results. Meanwhile, derivatives exchange Huobi started to restrict leverage trading and blocked new users from China.

Finally, on June 21, the People’s Bank of China (PBoC) instructed banks to shut down the bank accounts of over-the-counter desks and even their social networks accounts were banned. OTC desk essentially act as a fiat gateway in the region so without them it would be difficult to exchange from Bitcoin to stablecoins.

As these events unfolded, some analysts were reluctant to describe the tactics as nothing other than meaningless FUD, but in hindsight, it appears that China launched a very well-planned and executed attack on the Bitcoin network and mining industry.

The short-term impact could be considered a moderate success due to the collapse in Bitcoin price and the rising concerns that a 51% hashrate attack could occur.

Despite the maneuvers, China’s attack ultimately failed and here are the main reasons why. 

The hashrate recovered to 100 million TH/s

After peaking at 186 million TH/s on May 12, the Bitcoin network hash rate, an estimate of the total mining power, started to plunge. The first couple of weeks were due to restrictions to coal-powered areas, estimated at 25% of the mining capacity.

However, as the ban extended to other regions, the indicator bottomed at 85 million TH/s, its lowest level in two years.

Bitcoin estimated hashrate. Source: Blockchain.com

As the data above indicates, the Bitcoin network’s processing power recovered to 100 million TH/s in less than three weeks. Some miners had successfully moved their equipment to Kazakhstan, while others shifted to Canada and the U.S.

Peer-to-peer (p2p) markets carried on

Even though the companies involved in crypto transactions have been banned from the country, individuals continued to act as intermediaries—some of these recorded over 10,000 successful peer-to-peer transactions according to data from the exchange’s own ranking system.

Huobi Global peer-to-peer market advertisement. Source: Huobi

Both Huobi and Binance offer a similar marketplace where users can trade multiple cryptocurrencies including USD Tether (USDT). After converting their fiat to stablecoin, transacting on a regular or derivatives exchange becomes possible.

Asia-based exchanges still dominate spot volume

A complete crackdown on trading from Chinese entities would likely be reflected in the exchanges previously based on the region, like Binance, OKEx, and Huobi. However, looking at the recent volume data, there hadn’t been a meaningful impact.

Weekly spot volume, USD. Source: Cryptorank.io

Take notice of how the three ‘Asia-based’ exchanges remain dominant, while Coinbase, Kraken, and Bitfinex are nowhere near their trading activities.

China’s ban on Bitcoin mining and transactions may have led to some temporary hiccups and a negative impact on BTC price, but the network and price have recovered in a way that is better than many expected.

Currently, there is no way to measure the OTC transactions where larger blocks are traded but it is just a matter of time until these intermediaries find new gateways and payment routes.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.