- The price of Bitcoin suffered a fatal setback last week as it revisited the crash levels of May 19, but this week is promising.
- Miners scramble to reallocate as China crackdown on BTC mining in several regions.
- Investors are mobilizing to offset Bitcoin’s energy consumption through green initiatives.
Bitcoin’s price action has been brutal over the past week as it slipped to levels not seen nearly a month ago. Although the recovery has been slow so far, investors can expect a sped up acceleration the following week.
While the news from El Salvador did not significantly catalyze the price of Bitcoin, developments around Bitcoin mining in China appear to have had a noticeable effect. While it has destabilized the daily functioning of miners, many are moving to places favorable to regulation.
Minors forced to move
The Bitcoin hash rate fell about 50% from May 15 to June 23, with China banning Bitcoin mining in major hubs like Sichuan and Xinjiang. These two domains contributed around 30% of Bitcoin’s total hash rate.
Bitcoin’s 7-day average hash rate is currently 104,000 peta hashes per second (PH/s), down 42% from 180,000 PH/s on May 13.
BTC hash rate table
The repercussions of China’s decision led Canaan, a maker of mining machinery, to start operations in Kazakhstan.
While a small batch is already functional and ready for deployment, an executive familiar with the matter said the company is partnering with local mining companies and will increase production.
Poolin, one of China’s largest crypto mining pools, has said it is suspending BTC and ETH payments.
They earned these rewards when users wager on Poolin’s exclusive hash rate tokens through the Mars protocol. As a result, the mining pool stops related operations.
Further revealing their plans for the future, the blog adds:
Given China’s tighter regulations and pending uncertainties, there is a consensus that moving overseas (ideally to North America) as soon as possible as an approach to compliance would be the logical choice for the sustainable development of cryptocurrency mining operations …
While the mining industry is in chaos, the topic seems to have been revived by Elon Musk, the CEO of SpaceX and the electric car company Tesla, when he questioned whether BTC miners were using no green energy.
While the creation of a Bitcoin mining council was a step in the right direction, investment companies are taking it to the next level. The cryptocurrency exchange, Gemini, has announced that it will pledge to offset 350,000 metric tons of carbon because of its use of the Bitcoin network.
Nicknamed “Gemini Green,” noted CEO Tyler Winklevoss,
As bitcoin emerges as a dominant store of value, it is imperative that we embed sustainability for future generations. We are proud to partner with Climate Vault to offset our exposure to non-renewable mining and help decarbonize bitcoin.
Bitcoin price sets the stage for a 15% rally
The price of Bitcoin suffered a massive drop between June 20 and 22, dropping from $ 36,137 to $ 28,805. While this resets the low range and creates a new trading range, not much has changed. The short to medium term upside potential remains between $ 42,000 and $ 43,000.
Currently, BTC is trading at $ 33,966, and one of the two scenarios looks likely. The former includes a dip in the demand zone, ranging from $ 31,111 to $ 33,900. This support area houses two crucial support floors, $ 32,286 and $ 33,018.
If the price of Bitcoin ever drops, investors can expect a reversal from the levels mentioned above. The resulting rally is likely to propel the flagship crypto to $ 37,331. This move will not be a step forward and will occur if BTC crosses to $ 34,800 and the 50% Fibonacci retracement level to $ 35,610.
While the target remains the same for the second scenario, the origin of the rally will be the upper limit of the demand zone at $ 31,111.
Perhaps the most prominent advocate of the incoming bullish trend is the 365-day market-to-realized (MVRV) model. This fundamental index measures the profit/loss of investors who bought BTC in the past year.
The recent crash pushed the price of Bitcoin up 20% and also reset the 365-day MVRV from 8% to -15.5%. This dip in the “opportunity zone” shows that short-term traders have made profits, allowing long-term holders to accumulate.
The supply of BTC on the exchanges further reinforces the bullish nature of the Bitcoin price. If the number of BTCs held in centralized entities increases, it acts as a potential selling pressure in times of massive and cascading sales.
However, this metric shows a decrease from 2.59 million to 2.55 million over the past ten days, suggesting that investors are confident in performing BTC prices.
To conclude, the price of Bitcoin appears to be bullish despite the recent crash, and the signs will be noticed over the weekend and week ahead. However, an unforeseen spike in selling pressure that pushes the flagship crypto below $ 31,000 will invalidate the bullish thesis and show weak bullish momentum.
In such a case, BTC could slide to $ 30,000 and retest the low range at $ 28,770 in a very bearish case.