Bitcoins price tanked -13% today, falling from $9,860 levels to a daily low around $8,563. Positive sentiment was on fire going into the weekend, but that quickly evaporated as last week’s gains quickly diminished. What caused the sudden drop, and what does Bitcoin price look like for the upcoming halving next week?
Bitcoin Price Sell-Off
Bitcoin price suffered steep sell-offs today, shedding nearly -13% in less than an hour. Many eyes were targeting $10,000 levels as Bitcoins price was hovering right around $9,860 this morning. The sharp sell-off sent Bitcoin to a daily low around $8,563. Since the initial sell-off, Bitcoins price has recovered a bit, currently hovering around $8,647.
Positive Vibes Go Missing
Heading into the weekend, all sorts of positive vibes were flooding the markets. Aside from investors being bullish on the upcoming Bitcoin halving next week, investors were also bullish on the fact that Wall Street billionaire Paul Tudor took a position in Bitcoin futures. Paul stated that
“My bet is it will be bitcoin as the best inflation hedge.”
Coinbase: Coinbase seemed to be a catalyst in the sell-off today. During the market volatility, Coinbase reported “basic connectivity issues along with a partial outage of the main website and mobile application.” In addition, Coinbase Pro was also experiencing issues. Coinbase continues to struggle to stay online during market volatility. This will be the second time this month. If we go back a little over a week ago, Bitcoin surged from $7,000 to $9,000 and the exchange went down.
Technical: Bitcoins price failed to hold a key support level at $9,100. This was the support region BTC looked like it was going to hold going into the halving next week. Earlier in May, we also outlined the technical analysis that showed $9,100 being a crucial region.
It will be crucial for Bitcoins price to get back above $9,100 in the short-term. If BTC goes into its 3rd halving below that level, you could very well argue the bearish sentiment is rolling in. In that case, it would be highly feasible that $8,000 could be tested on the downside. This would also get quite interesting since the 200 day moving average resides in that area. As of now, investors are looking for the recovery at $9,100 levels, but the technicals around $8,000 are starting to rear their ugly head.
Hash Rate: During the rally on Friday, Visionary Financial shared a post on Twitter outlining the Bitcoin hash rate. It was noted that the hash rate was still looking to break above the 1 year resistance level. It was also outlined that investors shouldn’t “buy into” this rally yet until we get that confirmation going into the 3rd halving. Historically speaking, hash rate and price have been highly correlated. This is why it seemed to make more sense to hold the line until you got that resistance break. At the time of the reporting, we are still waiting for updated hash rate data, but it appears that Bitcoin sold off before it could surpass the one year resistance, which is questionable.
Mining: Going into the 3rd halving for Bitcoin, miner block rewards get slashed in half which will put some strain on the network. Miners could very well be getting cold feet at the moment. We should get a better confirmation of this sentiment early next week. According to a recent article, the typical miner using Bitmain S7 devices would have to see a Bitcoin price around $15,000+ post halving to break even on their operations. Right now miners have seen their break even come to fruition pre-halving, which was right around the $6,800 level. It will be interesting to see the miner sentiment come next week.
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