Over the past day, bitcoin has shown a desire to rise in price, but it ended the day with a minimal gain of only $500. For Bitcoin, a movement of $500 in any direction is the same as a cryptocurrency standing still. Thus, at the moment the quotes have failed to correct against the last round of the fall, even by 38.2%. From our point of view, this indicates a very weak interest in bitcoin at this time among all market participants. That is, despite the fact that many crypto experts talk about the attractive price values of bitcoin, no one is in a hurry to buy it again. Therefore, the trades continue to take place around the levels of $36-37 thousand per coin.
Meanwhile, it became known that the hash rate of the Bitcoin network continues to fall. This means that the computing power spent on mining coins is reduced. Simply put, there are fewer active mining equipment that are currently working on bitcoin mining. This was last seen in China's Xinjiang province, when there were several accidents in coal mines, which resulted in power outages, due to which many mining farms did not work. But now, there are no problems with electricity in the largest mining areas, and the hash rate all falls equally. This suggests that a certain part of the miners have stopped mining bitcoin at this time (perhaps switched to other cryptocurrencies). As of May 30, the hash rate dropped to 124 EH/s, and on May 13 it was 171 EH/s. Experts note that miners incur various kinds of costs, including electricity costs, room rent, equipment cooling and maintenance. Thus, if bitcoin drops in price greatly, it becomes unprofitable to mine it. Therefore, some miners can really switch to other digital assets or simply turn off their equipment until better times. It should also be noted that due to the desire of the Chinese authorities to ban mining and seriously tighten the rules for regulating the cryptocurrency sector, many miners and financial platforms began to leave China. Naturally, they will need some time to transport equipment to another country, to connect everything, configure and start up again. Thus, the drop in the hash rate of the bitcoin network is partly due to innovations in China, which forced the miners to "close the shop". In theory, Bitcoin can resume growth when most of the miners leave China and settle in other countries. But the point is also that the mining of miners by itself does not greatly affect the bitcoin rate. The question is, after all, what part of the production the miners sell, and what they keep for themselves, in anticipation of a more attractive rate.
In technical terms, bitcoin made an attempt to quickly and abruptly resume its upward movement after a strong fall, but now it is already clear that there are much fewer buyers on the market than sellers, and the notorious institutions are in no hurry to invest in "digital gold". Moreover, there is now an outflow of miners from the bitcoin network. Thus, we still believe that bitcoin has a much better chance of a new fall than a resumption of growth. If bitcoin quotes manage to gain a foothold above the 38.2% Fibonacci level - $41,000, then this will slightly increase the likelihood of further growth in digital gold, but traders still need to get to this level.
The material has been provided by InstaForex Company - www.instaforex.com