The past few weeks were more or less equally volatile for the Bitcoin as well as the US Stock market. By the beginning of March, many analysts had claimed that Bitcoin is bullish and would cross the $20,000 mark. It certainly looked promising when it was well above the $9,000 mark by the first week of March.
However, the rise of COVID-19 casualties worldwide and in the US started to make investors nervous. People began pulling their money out of equities and fixed income securities. Safer havens such as gold were the preferred assets. As panic started spreading and deaths began to rise exponentially within a matter of a few days, Bitcoin prices began dropping fast. On March 13, the BTCUSD reached below $3,800.
Declining Hash rate made things worse for the BTC
Falling Bitcoin prices meant it was less rewarding for the participants of the Blockchain network. These participants started moving out of the system, and with that, the Hash rate started declining. A declining Hash rate meant the Blockchain network was becoming less secure. A recent report showed that the Hash rate has dropped by 50%.
Rewards for the BTC miners to be halved in May 2020
Satoshi Nakamoto designed the blockchain algorithm in such a way that the miners would be rewarded for every block they mine. And since there will always be a limited number of Bitcoins in circulation, the rewards to the miners will get halved every four years. The next halving cycle will begin sometime in May.
BTCUSD rise above $7,300 on April 3 despite the COVID-19 situation
- Some Bitcoin enthusiasts claim that BTCUSD will reach even higher as the halving of rewards gets nearer.
- Bitcoin faced a crucial resistance at $6,550, and since it broke that, it has now found vital support there.
- Robert Kiyosaki (1), the bestselling selling author of ‘Rich Dad Poor Dad,’ recently claimed in a tweet that gold is God’s money, and Bitcoin is people’s money. And that at times like these people should save gold and Bitcoin.
As of writing this article, Bitcoin is trading at $6,743.
Let us look at what the Technical Indicators have to say:
- The pivot point is at $6,553.3.
- Resistances are at $9,105, $11,783.4, and $14,335.7.
- Support is at $6,500, $4,555.4 and $3,321.1.
- The Relative Strength Index (RSI) has a Neutral indication, whereas the MACD has a ‘Buy’ sign.
