Recently, Bitcoin is witnessing severe breakdowns. The market was in utter shock when it fell below the threshold of $10,000, which is its support area against the US Dollar. However, the collapse only worsened when more supports such as 9,800 and 9,500 were crashed by this leading cryptocurrency. It seems like even the Bitcoin price analysis experts are unable to decipher why the currency remains in the bearish zone.
What Bitcoin has been going through lately is a bearish signal when analyzed technically. The bearish triangle worked its magic on Bitcoin in the previous year as well when it hit a record low of $3,318.62.
Even though, this time, Bitcoin has managed to stay at some slightly-higher highs when we examine the visibly asymmetrical pattern, the crash against the US Dollars that supported it is worrisome.
Effects of the Bearish Zone
The Bitcoin price analysts had prophesized that if Bitcoin falls into the bearish triangle, the intense buying interests and speculations will render $8,500 as the next level of support.
And now that their prophecy is turning out to be true, the investors are hoping that the Bitcoin holds to the thread and stays in the vicinity of 8,500. If this threshold is crashed too, then the next speculated level where Bitcoin might bounce would be $7,236.
Some analysts are finding it tough to digest $7,236 as a figure that can stay associated with Bitcoin in the long run and expect it to bounce back rather quickly, that is if it does end up falling that low.
Another school of analysts are apprehensive that- should Bitcoin prices go below $7,000- it might end up at the record low of $5,430 once again.
Cryptocurrency Market is Finding it Difficult to Hold Together
In the last 24 hours, Bitcoin has experienced a drop of 12%, which is alarming enough. This drop has reflected in the entire cryptocurrency market with Bitcoin Cash and EOS dropping down by 28%. Other than them, Ethereum, Litecoin, Binance coin, Stellar Lumens, and many more have experienced a double-digit fall.
The Flash Crash in Hash Rate
Various entities have come forward with the conclusion that it is the flash crash in the hash rate that could be credited with the fall in prices. On September 23, the hash rate collapsed to 40%, which was surprising because it is opposite to the highs it used to record earlier.
The fall in the hash rate can be further associated with the increasing competition amongst the miners who are increasing in numbers lately. Also, since the reports that China is planning to remove all crypto miners from its territory are catching fire, the situation has become more volatile.
Moreover, no matter how absurd it sounds, the fact that the dates of the crash coincide with that of the UN Climate Action Summit might not just be a coincidence. All thanks to the miners using dirty energy to mine new blocks.
Being the highest-ranking virtual currency, providing a 6,137.38% chances of Return on Investment, Bitcoin is believed to make a come-back in the future. Then again, the question is- when?
Well, the experts also suggest that it is the ribbon of resistance that will keep Bitcoin afloat because of its history. So as long as the Four-Hour exponential moving average (EMA) is in action, there is little to worry about given the volatile nature of Bitcoins.