The Paraguayan government is urging lawmakers to pass a bill that would impose up to 10 years in jail for illegal bitcoin miners, in response to the large amounts of electricity theft threatening the state-owned National Electricity Administration (ANDE). The bill includes provisions for Paraguayan police and prosecutors to seize and sell off mining equipment […]
Bitcoin News
US Mega Bank JPMorgan Predicts Harsh Drop In This Bitcoin Metric
In a recent research report from JPMorgan, the financial firm has predicted a harsh drop for one Bitcoin metric, forecasting a potential decline of the Bitcoin Network Hash Rate by 20% leading up to the Bitcoin halving in April 2024.
JPMorgan Expects Bitcoin Hash Rate To Drop
In the report, JPMorgan stated that the Bitcoin mining industry is at a crucible stage leading all the way to the Bitcoin halving in April 2024 and beyond. This is because the approval of a Spot BTC exchange-traded fund (ETF) could spark a rally against the backdrop of record hash rates and the impending block reward halving that threatens the industry’s revenues and profitability.
The report highlighted that the total four-year block reward opportunity is estimated at billion, due to the current price of Bitcoin (BTC), which is 72% lower than its all-time high in 2021. This figure represents a significant drop from its peak of billion in April 2021 and has fluctuated around billion and billion since the past year.
As such, the financial firm expects the Bitcoin mining sector to see the predicted 20% hash rate drop at the next Bitcoin halving in April 2024.
“We estimate as much as 80 EH/s (or 20% of the network hash rate) could be removed at the next halving (April ‘24) as less-efficient hardware is decommissioned,” the report reads.
Bitcoin halving is an event that aims to control inflation and it involves the reduction of Bitcoin miners’ rewards by half, and it takes place roughly every four years after miners solve 210,000 blocks.
Analysts Reginald Smith and Charles Pearce noted in the report that the bank favors mining operators that can offer the best relative value in light of the existing hash rate, operational efficiency, power contracts, and more.
JPMorgan chose Bitcoin mining company CleanSpark (CLSK) as its top pick among several companies listed by the firm, highlighting that the mining company offers the best balance of scale, growth potential, power costs, and relative value.
In addition, the firm highlighted the significance of other mining firms it listed. These include Marathon Digital (MARA), Riot platforms (RIOT), and Cipher mining (CIFR).
According to the firm, Marathon Digital is the largest mining operator, with the highest energy costs and lowest margins. Meanwhile, Riot has lower energy costs and liquidity, but Cipher has the lowest power costs with limited growth.
The firm also included an outweight rating table and price targets of the mining operators in the report.
The high cost of mining and the removal of inefficient hardware have been seen as some of the factors that tend to affect the Bitcoin mining industry.
Large amounts of electricity are needed for mining, and at first, this makes it too expensive for miners to continue their operation. Nevertheless, many also tend to come back whenever the next bullish cycle drives Bitcoin’s price to unprecedented levels.
Ethereum Reaches a “Do or Die” Range Following Harsh Rejection at $396
Ethereum’s price saw a rapid surge earlier this morning that sent it to highs of 6 before it faced a massive influx of selling pressure that caused it to nearly instantly reverse all of its recent gains.
This movement came about in tandem with a similar one seen by Bitcoin, which was able to push as high as ,600 before it lost its strength and plunged lower.
ETH now appears to be at a make or break level as it trades just below a crucial resistance level and above key support.
Which one of these levels is broken first should provide significant insight into its near-term trend.
Because the entire market is facing heightened selling pressure following the recent rejection, there’s a chance that the next movement will greatly favor sellers.
Ethereum Shows Signs of Weakness Following Early-Morning Rejection
At the time of writing, Ethereum is trading down just under 1% at its current price of 4. This is around the price at which it has been trading throughout the past several days.
It is important to note that buyers are attempting to guard against further losses following the intense rejection it posted earlier today.
This rejection came about when Bitcoin rallied up to highs of ,600, which created a tailwind that guided ETH to 6.
Almost immediately after these highs were reached, the crypto plunged down to lows of 0, before it stabilized around its current price level.
This turbulence struck a blow to the cryptocurrency’s market structure and seems to indicate that further downside could be imminent in the near-term.
Because Ethereum and BTC are closely correlated to one another at the present moment, where ETH trends next will likely depend on whether or not the benchmark cryptocurrency can guard against a decline below ,300.
It Is a Critical Moment for ETH as It Trades Between Crucial Levels
While speaking about Ethereum’s market structure in the aftermath of today’s turbulence, one analyst explained that 8 and 0 are the crucial levels to watch in the near-term.
“ETH / USD: Literally just watching to see which level breaks first, either we see 0 reclaimed soon or 8 is going to be broken and we see further downside to around 5 region…”
Image Courtesy of Cactus. Chart via TradingView.
The coming few days should offer insights into the state of the mid-term uptrend that has guided Ethereum higher throughout the past couple of months.
Any breakdown from here will likely come about as a result of Bitcoin being unable to stabilize above the lower-,000 region.
Featured image from Unsplash. Charts from TradingView.
Bitcoin Plunges Below $10,000 After Harsh Rejection: Is this It for Bulls?
Over the past few minutes, Bitcoin has plunged lower, just now losing the key ,000 price level, falling through it as if was not much more than a piece of soggy letter paper.
At the plunge’s worst, the cryptocurrency traded as low as ,850 (on some exchanges), falling nearly 5% from the local top at ,300 seen earlier today.
This move unsurprisingly caught many cryptocurrency traders with their pants down, with million or so worth of Bitcoin long positions on BitMEX being liquidated during the drop.
Does Bitcoin Remain Bullish?
While this drop was harsh, many are certain that the cryptocurrency’s medium-term uptrend remains intact, for just a few days ago, Bitcoin was changing hands for ,500; the fact the cryptocurrency remains at ,900, above the ever-important ,500 level, suggests bulls remain in control.
Trader Inmortal Technique shared the below chart on Tuesday, showing that Bitcoin’s bounce in the ,500 region is similar to a previous retracement in the ongoing uptrend.
BTC following the path it took last time it saw a correction like the one we saw last weekend would mean it will push towards fresh highs past ,500 in the coming days, highs likely around the ,000 region.
The retracement we just saw from ,300 does not invalidate this potential fractal playing out over the coming days.
$BTC pic.twitter.com/nUldOGJAdI
— Inmortal technique (@inmortalcrypto) February 18, 2020
Also, Bitcoin just printed an extremely positive signal on a longer-term basis: the 50-day simple moving average and the 200-day simple moving average crossed, with the former moving over the latter for the first time in nearly a year. Investopedia describes “golden cross” events like the one we just saw as the following:
As long-term indicators carry more weight, the golden cross indicates a bull market on the horizon and is reinforced by high trading volumes. […] It is interpreted by analysts and traders as signaling a definitive upward turn in a market.
Indeed, in 2019 Bitcoin rallied by nearly 200% from the time of the golden cross to the local top, and another golden cross in October 2015 preceded an over 6,000% move higher.
Featured Image from Shutterstock
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