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Analysts Set Their Sights on a Move to $9,600 as Selling Pressure Mounts

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  • Bitcoin has been facing unusually strong selling pressure throughout the past few hours, which appears to be coming from multiple large mining pools
  • This caused the price of BTC to crater, dropping as low as $10,700 before finding some support that allowed it to climb significantly higher
  • One analyst is now noting that this latest decline struck a blow to its technical outlook, leading him to set his sights at $9,600
  • A decline to these lows would be significant but may be followed by massive upside

Bitcoin and the entire cryptocurrency market have been flashing some signs of weakness throughout the past several hours, with BTC plunging 5% while the rest of the market tanks in tandem.

This latest decline struck a heavy blow to the market’s strong uptrend seen throughout the past several days and weeks.

Analysts are now noting that the cryptocurrency may need to decline significantly further before its descent is able to slow, which could mean that a movement to the sub-$10,000 region is imminent in the near-term.

Bitcoin Plunges Below $11,000 as Selling Pressure from Miners Grows

At the time of writing, Bitcoin is trading down nearly 5% at its current price of $10,850. This is around the price at which it has been trading throughout the past few days.

Analysts are noting that where it trends in the near-term may depend largely on whether or not it can push back above $11,000, as a move above this level would be technically significant.

If this level is flipped into support in the near-term, it may provide the benchmark cryptocurrency with a launchpad for a sharp rebound.

Much of this selling pressure does appear to be coming from miners, as multiple large pools began transferring their holdings to exchanges today.

BTC to Target $9,600 – Claims Fund Manager 

One bearish near-term scenario for Bitcoin is if it rejects at $11,000, as this would confirm that its previous support has flipped to resistance.

This may be a realistic possibility, as one fund manager is now noting that he is watching for a movement to $9,600 before he flips long on the cryptocurrency.

“We’ll get a glorious BTC long in at 9.6k okay?” he said while pointing to the below chart, which shows the lack of support directly below BTC’s current price.

Image Courtesy of Mohit Sorout. Chart via TradingView.

Whether or not Bitcoin can push towards – and above – $11,000 in the near-term may be the factor that determines where it trends next.

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.