Bitcoin (BTC) suddenly dropped $ 52,000 on April 18 as a reminder of how price action has often tracked retail.
1 hour light chart BTC / USD (Bitstamp). Source: TradingView
China and the US are outperforming bitcoin sales
Cointelegraph Markets Pro and TradingView both showed tough hourly for bitcoin bulls around the world early Sunday morning as the market rose from $ 59,000 to $ 52,000 in minutes.
After losing $ 60,000 in support early this weekend, the Bitcoin / USD price remained fairly stable until the price rally, leading to nearly $ 10 billion worth of deals being liquidated in the past 24 hours.
Around $ 7,000 defies its hourly record loss in February after Bitcoin hit $ 58,000 for the first time.
Then, analysts cited two incidents as possible causes: a drop in the hash rate and rumors from unnamed sources that US regulators were charging unidentified “financial institutions” with money laundering charges related to cryptocurrency.
By some estimates, the hash rate – an estimate of the computing power assigned to a miner’s network – has nearly halved. This was caused by massive power outages in the Chinese province of Xinjiang, where a large number of miners were fired two days earlier.
In the classic depiction of the old adage “price depends on hash rate”, BTC / USD appears.
“Price and hash rate have always been correlated,” said statistician Willie Wu, pointing to a similar event in November 2017.
At that time, Wu added, the effect on the price action was temporary and by that time the retail rate had “almost fully recovered.”
Bitcoin hash in relation to BTC / USD. Source: Willie Wu / Twitter
Nick Carter, Co-founder of Coin Metrics, was misplaced when the unrest began in Xinjiang, but he expected media interest in the event to be significant.
“If the blackout continues for three weeks, Bitcoin will have a great historical difficulty in adjusting, but I think this is unlikely – either the network will return to the internet or the miners will move their devices,” he said in a discussion on social media. at. Saturday.
Bitcoin’s difficulties diminish as the miners leave the network, but according to recent estimates, the next adjustment will only result in a moderate decline of 1.8%.
Do not panic among the pranksters
Meanwhile, a different topic seemed to be like a separate tweet from US lawsuits.
Cited during the price crash, FXHedge’s Twitter account is citing anonymous “sources” as warnings that regulators are suing anonymous “financial institutions” for laundering cryptocurrency-related money.
No further details were revealed, but the tweet quickly garnered more than 5,000 likes and nearly the same number of tweets, followed by a $ 52,000 drop.
While the mainstream media covered the events, bitcoin veterans were cooler than ever about what’s common in the bull run.
Podcast host Stephen Lever wrote in a tweet: “Honestly, after you’ve been in the game long enough, you’re in awe of the low bitcoin prices.”
“Bitcoin alone is doing things on its way to $ 10 million.”
At the time of writing, BTC / USD has recovered about half of its losses, and is trading above $ 56,000.
Raphael Scholes Kraft, co-founder and chief technology officer of online monitoring resource Glassnode, cited the classic chain account as evidence that now is the ideal time to buy bitcoin.
The Used Deal Out Out Ratio (SOPR), which measures gross profit and loss, was “reset” for the first time from $ 61,700 full time in March.