BTC Still Below $7000, As Hashrate Records Drop Weeks before...
Bitcoin, News

BTC Still Below $7000, As Hashrate Records Drop Weeks before Halvening

  • Bitcoin’s hashrate is declining, weeks away from May halvening event
  • The price of BTC, hashrate and network difficulty are directly correlated
  • BTC price is currently facing resistance at the $7000 mark.

The price of Bitcoin, $6,651.37 – at the time of writing, has been on the $6,000 mark for the past week and seems to be approaching the $7000 mark, according to CoinMarketCap data.

 However, BTC is facing resistance against the USD in a pattern that analysts predict to be bearish below $7000, potentially driving prices down to the $6,400 mark.

Meanwhile, Bitcoin kicked March off with a peak hashrate of 136.2TH/s, which according to chart data from Blockchain.com, has dropped by almost half to the current 75.7 TH/s.

In a similar downward trend, data from the Coin Dance analytics site indicates a drop in hashrate at 114.5PH/s compared to the beginning of the month at 119.7PH/s.

The Drop-in Hashrate Might Have an Effect on Bitcoin Prices and Difficulty Level

Hashrate is a measure of the number of calculations performed by a network per second. It is related to price and network difficulty, which reduces when fewer miners are competing for computational power on the Network.

In Bitcoin mining, when there’s more competition between miners to validate new blocks, the hashrate is high and vice versa. Every block on Bitcoin’s Network takes ten minutes to verify, with two weeks difficulty adjustment intervals.

The currently decreasing hashrate indicates decreased activity on the Bitcoin Network, only a few weeks from the much anticipated May Halvening event. Less activity on the Network makes Bitcoin more vulnerable to 51% attacks, especially during this global Coronavirus outbreak, which has led to an increase in the number of crypto scams.

In the past, the relationship between Bitcoin’s price, miners’ profitability, and hashrate has always been directly proportional. However, data from btc.com predicts a further 16% decrease in difficulty levels in the next two weeks.

BTC Price Has Several Support Points below the $7000 Mark

Bitcoin’s turbulence in March saw it drop below the $3,600 mark following the crypto market crash that was fueled by the dire state of economies around the world.

While all markets were affected, the revelation that Bitcoin was not safe a haven, as previously thought, has left analysts wondering whether Bitcoin will rise and stabilize ahead of the traditional global markets.

The $7000 mark seems to be the current BTC’s price resistance area, which has managed to stay above the $6,400 mark for a week and even to go as high as $6,800 and $6,900.

If Bitcoin prices were to decline, the first support area is the $6500 mark, followed by major support near $6520, which is a similar 50% Fib retracement level saw the $5,752 support area go as high as $6,880.

Consequently, the BTC/USD pair indicates a bullish trend with a support area near $6120, which, together with $6320, would be strong support areas in case the current price started a major downside correction.

Finally, there is hope for BTC to climb up to higher resistance levels of $7500 and $7550 if it beats the current resistance at $7000 to rise to $7200.

coinmag

Wayne is a Blockchain enthusiast and expert in crypto trading. Currently, he covers trendy issues on digital currencies.