Bitcoin price is likely to react to the downside if it continues to struggle near $13,200 and $13,300
Bitcoin price made another attempt to gain momentum above $13,200 against the US Dollar but failed. BTC is likely to react to the downside if it struggles near $13,200 and $13,300. Bitcoin corrected lower below $13,000, but it found support near $12,800. The price is back above the $13,000 zone and the 100 hourly simple moving average. The pair must gain strength above $13,200 to continue higher towards $13,500 in the near term.
Bitcoin price is lacking Momentum
Bitcoin price failed to stay above the $13,200 zone and started a downside correction. BTC broke the $13,100 and $13,000 levels, but the bulls could defend the $12,800 region. A low is formed near $12,790, and the price is currently rising. It is back above the $13,000 zone and the 100 hourly simple moving average. There was a break above the 50% Fib retracement level of the recent drop from the $13,247 high to the $12,790 low.
On the upside, the $13,150 level is an initial hurdle for the bulls. It is close to the 76.4% Fib retracement level of the recent drop from the $13,247 high to the $12,790 low. There is also a connecting bearish trend line forming with resistance near $13,200 on the BTC/USD pair’s hourly chart.
Bitcoin price must clear the $13,200 resistance and gain momentum to continue higher. The next major resistance on the upside is near the $13,300 level, above which the price might test $13,500.
If Bitcoin fails to climb above the trend line and the $13,200 resistance zone, there could be a bearish reaction. Initial support is near the $13,000 zone and the 100 hourly simple moving average.
A downside break below the 100 hourly SMA could lead the price towards the $12,800 support. There is also a key bullish trend line forming with support near $12,880 on the same chart. A clear break below the trend line support could open the doors for a larger decline in the coming sessions.
Mining data aggregators attribute a slump in Bitcoin’s hash rate to the end of the wet season in Sichuan
According to Thomas Heller of Hashr8, roughly 22 exahashes per second (EH / s) of mining power had left the Bitcoin network, coinciding with the end of the season the previous day. The hasharte Bitcoin plummeted towards the end of the rainy season in Sichuan, leading to more miners moving to other jurisdictions.
Kevin Zhang of mining-focused Digital Currency Group subsidiary Foundry also estimated a 20 EH / s drop, noting the seven-day average for Bitcoin’s hashrate was 132.9 EH / s while daily hash rate concurrently tagged 112.9 EH / s. Blockchain.com estimates Bitcoin’s hash rate to have fallen from 151.1 EH / s on Oct. 24 to 116.3 EH / s the following day.
Bitcoin hash rate 12-month chart: Blockchain.com
The most recent data from the University of Cambridge’s Bitcoin Electricity Consumption Index (BECI) estimates the province represented 18.5% of global hash rate as of April 2020 – which was double the rate prior to the rainy season.
In 2018, it is estimated that 80% of Chinese miners switch to Sichuan for the rainy season from other parts of the country. CoinShares data released in December 2019 estimates Sichuan represents 54% of global mining activity.
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