Bitcoin lately dropped from its high of $10,000 to around $8,600. There were rumors that Satoshi, the Bitcoin founder, did the transfer of 50 BTC from an eleven-year-old wallet. There is no evidence to prove its authenticity.
It promoted a quick selling spree of Bitcoins, however. Investors who know and believe the potential of BTCUSD, were precisely waiting for this moment.
BTC likely to drop soon and consolidate: and investors love it
The smart investor invests when the market is fearful. That is when one can buy great assets at attractive prices.
BTCUSD is currently trading at around $8,772. The day’s range is $8630.00 — $8819.44.
Those who bought BTCUSD at around $10,000 would look for profit-booking or exiting at minimal losses. That is a typical retail investor mentality. Therefore, if BTCUSD starts rising towards the $10k mark, we would witness another sell-off pulling prices down.
Bitcoin Hash rate fell significantly after halving
Hash rate refers to the processing power of the Bitcoin network. It comes from the combined computing power of the miners in the system. Now, post the BTC halving on May 12, the rewards have become exactly half for the miners.
Several miners using the old mining hardware would require a lot of electrical energy and time to cater to the network. The number of Bitcoin rewards getting halved would have driven a lot of miners out of work. They were simply not able to breakeven.
This hashing pattern was last seen in 2018, which resulted in an almost 5000% return
To illustrate the point, let us look at the BTCUSD daily timeframe. The lower part of the chart is the Bitcoin Hash Ribbons.
We can see that there is going to be a capitulation. It occurs when the short term rate falls below the longer term.
Noted Bitcoin analyst, Charles Edwards pointed out that the best time to buy Bitcoins is during this capitulation. The biggest bull usually comes after the recovery, when the short term rate crosses above the longer term.