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Technical Analysis of BTC/USD for Apr 8, 2020
Crypto Industry News:
Bitcoin hash exploded from 91.290.582 TH / s from April 4 to 121.029.181 TH / s on April 6. Historically, Bitcoin hashrate and price showed a very close relationship, with a correlation of 0.77.
This relationship makes sense, given that hashrate represents the cost of producing Bitcoins for miners on the one hand, and the overall security of the Bitcoin network on the other. In other words, the higher the total hashrate, the more expensive it will be to take over the network. This decentralized trust is one of the key values that Bitcoin possesses.
At the same time, the price of Bitcoins increased only by 0.92%. The rapid increase in the value of hashrate is the result of a recent favorable adjustment of Bitcoin mining, which in itself was caused by an earlier decrease in the value of hashrate on the network.
If the Bitcoin / hashrate price correlation remains constant, we can expect a significant increase in prices. However, the dynamics are complicated by the upcoming halving of prizes in the form of Bitcoin blocks, for which only 36 days are left.
When everything else remains constant, the miners’ income will also be halved after being halved. On the other hand, for miners’ revenues to remain at the same level, the price would have to double (maintaining constant mining efficiency). The recent increase in Bitcoin hashrate may indicate that miners are betting on the second scenario.
Technical Market Outlook:
The BTC/USD pair has recovered from the recent loses. The price has hit the level of $7,028, but bulls quickly moved the rate back towards the recent high at the level of $7,392. Currently, the bulls are preparing to rally higher towards the level of $7,757. Nevertheless, if the bearish pressure will intensify again, then the price might lose the momentum and move even lower towards the technical support located at $6,908 or even towards the level of $6,586.
Weekly Pivot Points:
WR3 – $8,726
WR2 – $7,938
WR1 – $7,363
Weekly Pivot – $6,545
WS1 – $5,997
WS2 – $5,159
WS3 – $4,567
Trading Recommendations:
The fear of the coronavirus consequences is very strong among the global investors and it rules on the financial markets. So far the global investors are not so keen to invest in Bitcoin and treat BTC as a digital gold. The larger time frame trend remains down and as long as the level of $10,791 is not violated, all rallies will be treated as a counter-trend corrective moves. This is why the short positions are now more preferred.
The material has been provided by InstaForex Company – www.instaforex.com
