Bitcoin (BTC) started the new week by rising again towards $ 60,000 after crashing to $ 52,000 on Sunday. So what’s next?
Cointelegraph took a look at five factors that could affect Bitcoin price action in the coming days.
Stock markets are expected to rise in the short term
The situation in macro markets appears to be relatively stable in Asia and Europe. In the US, the markets have not yet been opened.
Although different scenarios faced investors, there was no overall fluctuation.
Therefore, the exchanges are not expected to make a big week to Bitcoin this week. In the stock markets, the rise is expected to continue in the short term.
Bitcoin recovered from $ 52K
In the Bitcoin circles, the sudden collapse on the weekend is at the center. With this sudden drop on Sunday, Bitcoin lost $ 7,000 in value within minutes.
Bitcoin Price Index: How much is 1 Bitcoin in TL? (BTC TL)
The crypto money, which bounced just above $ 52,000, was able to recover 50 percent of the value it lost in the following hours.
Members of the crypto community are focusing on what caused this collapse, and the power outage in China that affects the hash rate and the processes that US regulators will initiate regarding crypto-related money laundering accusations for financial institutions.
Popular statistics expert Willy Woo emphasized that both China and futures market investors were behind the decline.
Woo said, “We’ve seen the biggest one-day drop in mining hash rate since November 2017. The hash rate has almost halved, causing confusion in the BTC market,” Woo said. he summed up.
On the other hand, the statistician said the rate of return on output (SOPR) indicates that long-term investors will end the sale soon.
“The on-chain SOPR gauge is almost zeroed. So, long-term investors have finished taking profits. This is a classic take bottom signal. ”
The fundamentals point to the rise
Not only SOPR, but many indicators and bases in the Bitcoin network point to a continuation of the uptrend.
“Strong saviors buy at the bottom price,” said analyst William Clemente. Over 200 thousand Bitcoins have been removed from the liquid supply in the last 24 hours. This is the record for the last 3 years ” he stated.
Willy Woo added that about 13.5 percent of Bitcoin’s current supply is active at over $ 53k, confirming that the cryptocurrency is a $ 1 trillion asset. Bitcoin’s market cap sees $ 1 trillion while its price is around $ 53,800.
The difficulty compensates for the drop in hash rate
The hash rate, which decreased by almost half over the weekend, has also started to recover.
The hash rate of the Bitcoin network has already exceeded 150 EH / s, according to estimates by on-chain tracking resource Blockchain.com. The hash rate exceeded 200 EH / s for the first time in history last week.
Miners losing the network due to power outages resulted in less difficulty to provide incentives to other miners.
Although the difficulty is expected to decrease by 4 percent in the next correction that will occur within two weeks, the expected decrease may not occur with the return of the miners.
Praise from the Chinese central bank to Bitcoin
An unexpected event also happened in China. China gave the green light to cryptocurrencies as “an investment alternative”.
Speaking at a conference organized by CNBC, Li Bo, President of the People’s Bank of China (PBoC), said, “We consider bitcoin and stablecoins as crypto assets. These are investment alternatives.”
Although China is the center of Bitcoin mining, this comment came as a surprise. China banned cryptocurrency trading and trading in September 2017.
Charles Edwards, founder of investment firm Capriole, said: “All countries that ban Bitcoin are taking back this ban. You cannot be competitive in the 21st century economy without it. ” he summed up.