Bitcoin – Hash Rates Slide, another Ominous Side for the Bulls

Bitcoin finds support early on, but it’s not going to be enough to reverse the week’s losses, with hash rates also on the slide as miners head for the door.
Bob Mason
Bitcoin Newspaper

Bitcoin gained 1.19% on Friday, partially reversing Thursday’s 6.33% slide, to end the day at $4,422.7. The day’s gain reduced the week’s loss to 21.85% in what was another relatively choppy day by recent standards.

A bearish start to the day saw Bitcoin fall through the day’s first major support level at $4,233.23 to an intraday low and new swing lo $4,210 before finding much needed support to move through to a late morning intraday high $4,495.

Falling short of the day’s first major resistance level at $4,614.83, Bitcoin eased back to $4,300 levels before a late move back through to $4,400 levels to lock in the gains for the day.

The gains on the day came in a relatively quiet day on the crypto news front, with the damage having already been done by the Bitcoin Cash hard fork and a number negative news pieces during the week that could ultimately lead to a further delay the approval of a Bitcoin ETF.

While Bitcoin tries to hold on and avoid falling back to $3,000 levels, hash rates have been on the slide, with Bitcoin’s hash rate sliding from a start of a month 60.4225E to 38.9079E, the slide coming alongside Bitcoin’s price collapse, with miners reportedly dumping Asics machines, which does raise the question of where the network support would come from if the Bitcoin mining cartel shift attention elsewhere in search of profitability.

Unlike the bubble survivors, who had a viable business that provided support to share prices through earnings and outlook, Bitcoin has no such offering to investors and is fully dependent upon the network to function, miners needing to verify transactions on the blockchain.

No miners, no verifications, no blockchain, no Bitcoin. As hash rates continue slide, there will be a breaking point, if not already reached, and that could spell more trouble for Bitcoin and the broader market should a rebound fail to materialise.

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At the time of writing, Bitcoin was up 1.27% to $4,479, a bullish start to the day seeing Bitcoin rise from a morning low $4,412.2 to a morning high $4,529 before easing back, Bitcoin coming within range of the first major resistance level at $4,541.8 early in the day.

For the day ahead, a move back through to $4,500 levels would support another run at the first major resistance level at $4,541.8, which will likely continue to pin Bitcoin back from a run at $4,600 levels to leave the second major resistance level at $4,660.9 out of reach for the day.

Failure to move back through to $4,500 levels later in the day could see Bitcoin hit reverse, with a pullback through the morning low $4,412.2 bring $4,300 levels and the day’s first major support level at $4,256.8 into play before any recovery, heavier losses unlikely barring particularly negative new hitting the wires.

We’ve not heard from the SEC yet and, while price manipulation and hacks will likely do more damage near-term, the next key driver will be the Bitcoin ETF decision and if it’s bad news, it could get quite interesting, with the hopes of an approval and a sizeable inflow of institutional money providing much needed support that has seen Bitcoin avoid a slide back to well below $3,000 levels.

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