Bitcoin (BTC) plummeted to $ 52,000 on April 18. The coin thus reminded again that price action generally follows the hash rate.
China and US rumors may be behind the collapse
According to Cointelegraph Markets Pro and TradingView data, Bitcoin fell from $ 59,000 to $ 52,000 in minutes on Sunday morning.
BTC / USD, which lost its support of $ 60,000 at the beginning of the weekend, was moving relatively stable before this crash. With the sudden collapse of BTC on Sunday morning, almost $ 10 billion worth of positions were liquidated in the past 24 hours.
Crypto money lost 7 thousand dollars in minutes, losing all the gains it gained with the seeing of 58 thousand dollars in February.
Analysts point to two possible reasons behind this crash: a hash rate collapse and rumors that US regulators are about to accuse some of the “financial institutions” that have not disclosed anonymous money laundering associated with cryptocurrencies.
The hash rate, which refers to the estimated computational power miners spend on the Bitcoin network, has almost halved according to some estimates. The reduction in hash rate was due to a power outage that started two days ago in China’s Xinjiang region, which is home to a large number of miners.
The BTC / USD price also fell, following the hash rate in a classic way.
Saying that price and hash rate always correlate statistician Willy Wooexplained that the effect on price action is temporary, while the hash rate has almost completely recovered during this period.
Investors did not panic
On the other hand, a single post about US regulators also appears to affect market sentiment.
U.S. TREASURY TO CHARGE SEVERAL FINANCIAL INSTITUTIONS FOR MONEY LAUNDERING USING CRYPTOCURRENCIES -SOURCES
— FXHedge (@Fxhedgers) April 18, 2021
Twitter account FXHedge, according to anonymous sources, reported that US regulators charged unnamed “financial institutions” of money laundering associated with cryptocurrencies. announced that he would sue.
Although no further details have been given yet, the post received over 5,000 likes and as many retweets.
The mainstream media also showed interest in the subject, but experienced Bitcoin investors took it quite calmly.
“You really don’t care about Bitcoin price bottoms when you’ve been in the market for this long,” publisher Steven Livera said. he summed up.