It’s hard to believe that this IPO did not affect Bitcoin’s crash.
Weakness appears after the power outage in Xinjiang
According to Coinmarketcap.com, the power outage of China’s Xinjiang region could be the reason for the sell-off of the world’s largest digital currency. Xinjiang is believed to be an important source of electricity for Bitcoin mining.
The power outage of China’s Xinjiang region causing the world’s largest technical currency to sell off reveals a fundamental weakness: the Bitcoin system is decentralized, but the mining system is not…
Bitcoin price fell 14% on Sunday (April 18) in US time, reversing almost all gains achieved in the previous week.
After falling to the threshold of S51,500, Bitcoin price has recovered this morning (April 19) Vietnam time. At 6 o’clock, the Bitcoin price according to data on Coinmarketcap.com was $56,366, down more than 8% from 24 hours ago.
At this price, Bitcoin is down more than $10,000 from the record highs set on Wednesday last week.
Mr. Luke Sully, CEO of Ledgermatic, told Reuters news agency that investors “may have sold off Bitcoin because of news of power outages in Xinjiang, instead of the actual effect of the power outage on the entire system.”
“The power outage raises a fundamental weakness of Bitcoin: the Bitcoin system is decentralized, but the Bitcoin mining system is not,” added Sully.
Some highly followed blockchain analysts on Twitter claim that the power outages in Xinjiang have caused the “harsh rate” to drop drastically. This is an index that shows the processing capacity of the entire Bitcoin network and determines how much electricity miners use to produce new bitcoins.
“Usually, ‘harsh rate’ shocks do not cause the price of Bitcoin to plummet. But ‘harsh rate’ slows down transactions, making it difficult to move Bitcoins to exchanges for sale. Bitcoin’s recent decline is clearly within the framework of the usual volatility, ”commented Sovryn co-founder Edan Yago.
Bitcoin’s decline also comes after the Central Bank of Turkey Friday banned the use of virtual currency to buy goods and services.
Oanda analyst Edward Moya says the cryptocurrency market is ripe for a correction.
“The market has become outrageous about everything,” Mr. Moya said. “Any kind of negative information can lead to the price of Bitcoin falling like this.”
Many cryptocurrency exchanges operate 24/7, leading to the fact that cryptocurrency prices can fluctuate sharply at unpredictable times. Usually, in Bitcoin’s history, the retail and amateur investors have been the biggest force for price volatility.
Despite the recent sell-off, Bitcoin’s price is still up 89% year-to-date, thanks to increasingly widespread adoption by mainstream investors as an investment channel and means of payment. Also, Bitcoin also benefits from the trend of global investors flocking to buy stocks, ETF certificates, and other risky assets.
JPMorgan: If Bitcoin does not return to the $60,000 marks soon, the driving force will ‘collapse’
In the most recent Bitcoin volatility that JPMorgan strategist Nikolaos Panigirtzoglou has seen, investors have returned in time to prevent further declines. However, at this time, Panigirtzoglo was quite concerned.
The group of strategists wrote in a note published on April 20 that, if the world’s largest cryptocurrency does not soon return to the $60,000 mark, the driving force will soon collapse.
Likely, trading parties including Commodity Trading Advisor (CTA) and crypto hedge funds have been among the factors buying Bitcoin futures in recent weeks, they said.
The group of strategists wrote: “Over the past few days, the Bitcoin futures market has experienced a strong sell-off similar to what it was in mid-February, mid-January, and late November. this point until the next few months, while the uptrend is still going.”
During that 3 volatility, the overall momentum is strong enough to allow Bitcoin to quickly surpass key milestones, helping momentum traders increase positions.
“We have to wait whether those previous developments repeating in the present time. There is a possibility that there is, but the chance may be lower as the driving force behind seems to be increasingly decoupled and thus the trend could be reversed. Furthermore, the inflow of money into Bitcoin hedge funds also looks weak,” added strategists.
Around the time of Coinbase’s listing, Bitcoin rose to the $ 64,870 mark but quickly dropped to $ 55,000. This year, the coin is still up about 90%./.