Bitcoin's price has dropped below $8,000 for the first time since Oct. 25. The cryptocurrency is currently down more than 40 percent from the 2019 high of $13,880 registered in June.
While bitcoin's price has fallen sharply, its hash rate or computing power is showing resilience, as noted by trader Alex Kruger.
The 10-day moving average of bitcoin's hash rate has dropped by just 4 percent recently, Kruger tweeted on Wednesday, adding further that during the 2018 bear market, the non-price metric had declined by over 30 percent in a single month.
The hash rate's resilience indicates the miners are likely expecting the price to recover and are running operations roughly at the pace they have had since May. Another possibility is that higher computing power is being applied now as rewards per block mined will be reduced by 50 percent from May 2020.
That said, if prices continue to slide in the coming months, some sort of miner capitulation could be seen. Especially, miners with old versions of specialized mining machines, known as ASICs, could suffer losses, as noted by CoinDesk's Anna Baydakova, forcing them to close operations.
Historical data shows BTC tends to pick up a strong bid six months ahead of the reward halving. BTC, however, is struggling even though reward halving is due in May.
Jihan Wu, co-founder and ex-CEO of Bitmain, is “pessimistic” about the prospect of a price surge after the halving.
“Maybe people speculate too much before the halving, and then you can’t sell the good news anymore. Maybe, this time a bullish cycle is not coming yet," Wu said.
Bitcoin is set to undergo mining reward halving in May 2020, following which the reward for per block mined on the blockchain will drop to 6.25 bitcoins from the current 12.5 bitcoins. At inception, each bitcoin block reward was worth 50 BTC. |
Bitcoin Hits One-Month Low
BTC: Price: $7,870 | MCAP: $143.76 Billion | 24-Hr Volume: $19.29 Billion
Trend: Bearish Bitcoin has slipped to a one-month low of $7,870 and looks set to extend losses with the hourly chart reporting a high-volume contracting triangle breakdown or a bearish continuation pattern.
Key indicators like the daily and three-day chart MACD histogram and the relative strength index are also reporting bearish conditions.
Therefore, BTC risks falling to support of the three-day chart 100-candle average at 7,714. That would be the first test of the key average since the end of April.
Stocks are also losing ground today with the futures on the S&P 500 reporting a 0.25 percent drop at press time. The risk-off tone is likely due to reports stating that the phase-one of the U.S.-China trade deal is unlikely to happen this year. Moreover, traders are worried that the renewed Sino-U.S. political tensions over Hong Kong could complicate matters on the trade front.
Long-term trend: Neutral
BTC tends to pick up a strong bid six months ahead of the reward halving, according to historical data. The cryptocurrency is set to undergo reward halving in May 2020. So far, however, BTC has struggled to find love.
The 100-period weekly MA sets scope for $7,520, the most likely landing pad in BTC's price action as it falters along $8,100 amid low levels of volume.
A bullish reversal could be on the table, given a drop in both volume period-to-period alongside price, as per typical volume theory, but at this stage more buyers need to enter the market on the back of positive developments in the space, lest the bulls concede a drop to the level mentioned above. Read Analysis
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Digibyte Boost On Future Exchange Listings DGB: Price: $0.007851 | MCAP: $99.3 million | 24-Hr Volume: $611,146
Short-term trend: Cautiously bullish DGB, a modification of the Bitcoin protocol design that adjusts confirmation speeds and security assurances when transacting on the base layer is today's best performing asset in the top 100, according to data by Messari.
Up 19.03 percent, the short-term speculative sentiment is likely due to two planned listings on lesser known exchanges XERA and DigiFinex, set for March 2020 and Nov. 22 2019, respectively.
A continuation in its price is possible given momentum, demonstrated via the 'awesome oscillator' (AO) is beginning to tick up toward neutral 0, whereby a bull signal will be provided should it pass above. However, plan accordingly for a pullback to $0.00741 (50-day moving average) as traders look to a period of profit taking should conditions break down. Long-term trend: Bearish
DGB's market structure remains bearish in the long-term until a firm close above $0.00935 occurs with conviction, meaning traders might look to continue to build off a change in the trend from bearish to bullish, but only if they can muster the capital to drive it home.
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| | | | Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. |
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