Bitcoin has formed new 2018 lows yet again pricing in a low around $3300. Bitcoin began its decline from $3900 on Wednesday where it was consolidating just below the key $4000 level.
Bitcoin has since returned back up to $3400 but the downward move over the past few days has been extremely bearish for the prospects of the market leader. Today’s candle has been forming a Doji so far. A Doji candle is where the open is around the same point as the close and reflects indecision from traders.
Traders are likely cautious to push up the price from here after the return to bearish market conditions, and there is a strong possibility that the next significant move will be to the downside. RSI continues to decrease with momentum on the side of sellers.
One key concern which could be factored into this price decline is the fear that mining conditions have resulted in a cycle driving miners out of business and driving prices lower. The so-called mining death spiral consists of prices dropping making it unprofitable for smaller scale operations to mine. This is followed by these miners shutting down operations and any mining rewards being sold to the market which serves to push prices even lower again.
Cycles such as these would be unlikely to last for long as the network adjusts when to become less difficult to mine if miners shut down operations. However, there has been a significant decline in the hash rate which has resulted in a more insecure Bitcoin network with less computing power supporting it. The hash rate has declined over 33% from its peak in August.
- Bitcoin returns to bearish conditions and forms new 2018 low around $3300.
- Today’s candle has been forming a Doji showing uncertainty from the side of traders. Next significant move is likely to the downside.
- Bitcoin hash rate has decreased over 33% from peak giving rise to a more insecure network.
|DISCLAIMER: Investing or trading in digital assets, such as those featured here, is extremely speculative and carries substantial risk. This analysis should not be considered investment advice, use it for informational purposes only. Historical performance of the assets discussed is not indicative of future performance. Statements, analysis, and information on blokt and associated or linked sites do not necessarily match the opinion of blokt. This analysis should not be interpreted as advice to buy, sell or hold and should not be taken as an endorsement or recommendation of a particular asset.|