China’s bitcoin production fell sharply before a Beijing’s recent crackdown on cryptocurrency mining, according to research from the University of Cambridge.
Xi Jinping’s nation has long been the centre of global cryptocurrency mining but recently the government has cracked down on the industry.
However, the research found the decline in Chinese mining power came ahead of a crackdown by China’s state council, or cabinet, on bitcoin mining and trading in late May, citing underlying financial risks.
The crypto world started to bounce back yesterday after plummeting to its lowest level of 2021 earlier in the week. However, the signs of recovery appear to have been short-lived as Bitcoin (BTC) has now fallen again from $ 33,767 at 12.15am to $ 32,420 at 4.25am, which is a 3.99 percent drop. Meanwhile, Ethereum (ETH) fell from $ 1,972 at 0.20am to $ 1,896 at 3.50am – a 3.85 percent drop.
Meme coin Dogecoin (DOGE) also dropped from $ 0.2427 at 1am to $ 0.2235 at 3.15am after experiencing a 7.91 percent drop.
But Cardano (ADA) rose as it went from $ 1.21 at 2.30am to $ 1.31 at 5.45am, working out to a 8.26 percent rise.
Bitcoin in particular has had a tough week after it tumbled below $ 30,000 for the first time in five months following China’s announcement of its crypto-crackdown.
On Tuesday, it fell to about $ 28,890 and lost more than 50 percent of its value after reaching an all-time high of $ 64,870 in April.
It comes after banks in China were recently told not to accept cryptocurrency transactions.
Chinese authorise also forced Bitcoin mining in the province of Sichuan to cease last week.
The crackdown has sparked chaos as China made up around 65 percent of global Bitcoin production last year alone.
Cryptocurrency: Expert discusses success of Bitcoin
At 11am, Bitcoin was priced at $ 39,416. Musk tweeted at 12.07 and by 3.13pm it had dropped to $ 38,532 – a drop of over 1.5 percent.
1.63 percent drop in just over an hour. Ethereum fell 2.2 percent from $ 2,442 to $ 2,388 during the same period. And meme coin Dogecoin fell from a high of $ 0.314 at 8.15am to a low of $ 0.307 at 3.15pm.
The drop in prices for the cryptocurrencies comes after Elon Musk responded to reports Bitcoin is “greener” than critics say.
The entrepreneur and business magnate hit back at Jesse Powell, chief executive of the Kraken crypto exchange, who said bitcoin is “a lot greener than people give it credit for”.
Mr Powell toldBloomberg TVon Thursday that Musk has got “some more studying to do on this topic.”
Responding to the statement on Twitter, Musk said: “Based on what data?”
Bitcoin has seen prices tumble this afternoon, in response to comments by Elon Musk (Image: getty)
Bitcoin’s price fell this afternoon (Image: Getty)
The comment by the Tesla CEO has reignited his argument that Bitcoin is environmentally damaging due to the “insane” energy use required for the computing work that secures the network and creates new coins.
Last month, Mr Musk said his car company would stop accepting Bitcoin as a payment for its products due to concerns over how cryptocurrency mining contributes to climate change.
He said in a statement: “We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”
The announcement triggered a sharp fall in the price of Bitcoin.
From midnight to 5.50 am UK time, Bitcoin fell in value from $ 37,349 to $ 35,063 – a 6.1 percent drop, with a slump in the price of Ethereum and Dogecoin also being experienced. Dogecoin saw a drop of 7.8 percent after the price of the memecoin fell from $ 0.303 at 9.30 pm to $ 0.300 at 5.50 am. Ethereum fell 3.7 percent between midnight and 2.30 am, before recovering slightly.
The price of Ethereum now sits at $ 2,298.
The price of cryptocurrencies soared in value this week after El Salvador deemed bitcoin legal tender.
However, the current u-turn in price valuation could be due to a recent statement by the central bank regulatory authority, the Basel Committee on Banking Supervision.
Many banking groups are planning to gain exposure to cryptocurrency assets, such as bitcoin.
The Basel Committee on Banking Supervision supervisory group has advised these banks to set aside enough capital to cover losses on any bitcoin holdings.
The regulator’s advice about crypto-asset exposures would make it very expensive for banks to hold digital currencies.
This in turn could hinder a wider market acceptance of crypto-assets such as bitcoin.
One proposal made by the regulatory body is to attach a 1,250 percent risk to a bank’s exposure to bitcoins and certain other cryptos such as Ethereum.
Bloomberg senior commodity strategist Mike McGlone believes Bitcoin (BTC) is more likely to turn up and rally to $ 100,000 rather than correct to $ 20,000. In the June edition of the Bloomberg Galaxy Crypto Index report, McGlone said that Bitcoin’s correction had not dented its foundation and it was “stronger, greener and less extended” than in April.
While Bitcoin has yet to witness a surge in demand, data from Coinshares show crypto funds have turned the corner and after two weeks of outflows, investors have pumped $ 74 million into cryptocurrency.
Ether (ETH) products were leading the inflows with $ 47 million being pumped into them. Altcoins such as Cardano (ADA), Ripple (XRP) and Polkadot (DOT) each experienced more than $ 3 million in inflows.
Novice traders seem to be in a hurry for the next leg of the bull move to begin. However, that is unlikely to happen quickly because after the recent market reset, the transfer of assets from weaker hands to stronger hands will take time. The reactions to Elon Musk’s tweets show some froth still remains.
The crypto market may remain volatile as long-term investors are accumulating on lower levels but stopping their purchases at higher levels. Let’s analyze the charts of the top-10 cryptocurrencies and determine the critical support and resistance levels to watch out for.
Bitcoin rose above the resistance line of the symmetrical triangle on June 3 but the bulls could not push the price above the 20-day exponential moving average ($ 39,856). This suggests the sentiment remains negative and traders are selling on relief rallies.
The bears have pulled the price back into the triangle and they will now try to sink the price below the support line of the triangle. If they succeed, the BTC/USDT pair could retest the critical support zone at $ 30,000 to $ 28,000.
If this zone cracks, panic selling may set in and that could result in a drop to the next major support at $ 20,000. Such a deep fall could delay the start of the next leg of the uptrend.
The first sign of strength will be a breakout and close above the 20-day EMA. That will suggest the sentiment has improved and bulls are buying at higher levels. The rally could then extend to the 50-day simple moving average ($ 48,192).
Ether broke above the resistance line of the symmetrical triangle on June 3 but the bulls could not push the price above the 50-day SMA ($ 2,895). This may have attracted selling from short-term traders and the price dipped back into the triangle today.
The value of Bitcoin slumped from a high of $ 39,471 on Thursday to just $ 36,600 in early trading on Friday – a drop of 7.37 percent.
Ethereum fell 8.4 percent from $ 2,888 to $ 2,644 while Dogecoin plunged by a massive 13.9 percent from $ 0.43 to $ 0.37.
However, the massive fall in the price of the cryptocurrencies was accompanied by a strange Tweet from Tesla boss Mr Musk, who appeared to mock Bitcoin’s recent struggles.
The tech billionaire has been extremely vocal on social media about the use and future of cryptocurrencies.
But his tweets and comments regularly trigger significant upward or downward movements in the volatile market.
In February, the price of Bitcoin surged to an all-time high after he tweeted Tesla would begin accepting payments of the digital currency for sales of their electric cars.
Bitcoin’s price jumped by a fifth (20 percent )after Tesla said it had made a $ 1.5billion investment.
The firm added it would eventually accept the cryptocurrency as payment for its cars.
This resulted in Bitcoin’s largest daily increase in more than three years, climbing to more than $ 48,000.
Mr Musk briefly became the world’s richest person as shares of Tesla surged nearly 500 percent, with the firm also surging to fifth position in the ranking for the most valuable companies in the US.
But on May 17, Bitcoin’s price plunged to its lowest since February after the Tesla boss hinted the electric carmaker may sell its cryptocurrency holdings.
Bitcoin’s value slumped by almost 10 percent to below $ 45,000 after trading as high as $ 50,000 just a few days earlier.
The previous weekend, Mr Musk suggested the firm was considering selling or may have already sold some of its holdings in the cryptocurrency.
Bitcoin’s price drop was triggered by a tweet sent to the Tesla boss, which said: “Bitcoiners are going to slap themselves next quarter when they find out Tesla dumped the rest of their Bitcoin holdings.
“With the amount of hate [Elon Musk] is getting, I wouldn’t blame him.”
Mr Musk simply replied: “Indeed.”
He later followed up that Tweet following the panic he had caused, and frankly wrote: “To clarify speculation, Tesla has not sold any Bitcoin.”
That latest blow for Bitcoin comes a week after the Tesla chief executive said the company had stopped accepting Bitcoin as payment for its cars because of fears over its carbon emissions.
He announced the carmaker had stopped vehicle purchases with the cryptocurrency because of “rapidly increasing use of fossil fuels for Bitcoin mining”.
The Tesla boss tweeted: “We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”
Bitcoin’s price had skyrocketed to a record high of over $ 63,300 on April 16 having started the year on $ 29,300 following a strong finish to 2020.
But it has sliced in half since those record highs just six weeks ago, plummeting to just $ 33,600 last weekend.
Last month, Bitcoin suffered a huge hammer blow after the Chinese Government – home to the world’s second-largest economy – banned the use of the cryptocurrency as a form of payment.
Dogecoin (DOGE) prices jumped by nearly 40% on a 24-hour adjusted timeframe on Wednesday, shaking out more than $ 16 million worth of bearish leverage in just one hour while almost reclaiming its pre-crash high.
Leveraged bearish traders caught themselves on the wrong side of trading after Coinbase Pro, a United States-based crypto trading platform, announced that it would enable DOGE trading to its portal from Thursday.
“Starting immediately, we will begin accepting inbound transfers of DOGE to Coinbase Pro,” Coinbase confirmed in its blog post.
“Once sufficient supply of DOGE is established on the platform, trading on our DOGE-USD, DOGE-BTC, DOGE-EUR, DOGE-GBP, and DOGE-USDT order books will launch in three phases, post-only, limit-only and full trading.”
The news prompted a sudden overnight spike across DOGE spot markets, burning speculators who had placed bets on the cryptocurrency’s price decline.
The DOGE/USD exchange rate rose by up to $ 0.064, or 17.34%, after opening Wednesday in green. The pair reached an intraday high of $ 0.454 before witnessing a minor downside correction led by profit-takers. As of 12:07 UTC, DOGE was changing hands for $ 0.434.
Dogecoin also fared well against its top rival asset, Bitcoin (BTC). The DOGE/BTC exchange rate jumped 33% in the previous 24 hours, wiping all the losses that it had incurred against Bitcoin during the May 19 crash.
The past 24 hours witnessed Dogecoin short liquidations worth $ 47.83 million.
Bullish calls resurface
Dogecoin’s latest move uphill also prompted observers to predict a $ 1 valuation in the coming sessions, a level DOGE/USD missed after peaking out at $ 0.76 on Binance.
For instance, Primordial Hashrate, a crypto-focused newsletter service, cited Dogecoin’s Relative Strength Index (RSI) — a technical indicator that charts an asset’s current and historical strength or weakness — as its signal to bid DOGE/USD toward $ 1.
Ronnie Moas, founder of Standpoint Research — a Miami-based financial research startup — noted that Dogecoin’s addition on Coinbase Pro, a platform most popular among professional crypto traders, would open DOGE to “million more investors worldwide.”
Dogecoin grew into traders’ conscience primarily after it received backing from Elon Musk. The Tesla founder and CEO posted tweets in support of Dogecoin insofar that he ended up calling himself “the Dogefather” in jest, while also recently stating that he’s “Dogecoin’s master.”
Musk’s popularity became instrumental in pushing the DOGE/USD bids up by more than 15,300% in 2021, with its market capitalization hitting $ 92 billion, surpassing even Airbnb and Infosys.
But the supersonic price rally has also invited fear, uncertainty and doubt, or FUD, of a potential bubble. The panic almost engulfed the market after Musk called Dogecoin a “hustle” during his television appearance on Saturday Night Live on May 8, leading to a 45% price decline in the next three daily sessions.
The sell-off intensified further on May 19 amid a market-wide brutal sell-off. Dogecoin fell to as low as $ 0.29, down more than 74% from its all-time high of $ 0.76. Pseudonymous analyst the Asian Investor noted that Dogecoin is in the third stage of a “massive bubble” — the hype stage — that would soon follow up with deflation and panic-selling phases. He added:
“All hypes end. When this hype is over, people will look back on Dogecoin and wonder how wealth could have ever been created out of nothing.”
Dogecoin has rebounded by almost 132% after bottoming out at $ 0.29.
Bitcoin’s (BTC) active supply — coins that have moved in the past two years or earlier — dropped to a five-month low of 44.5% on June 2, according to data from Glassnode. This indicates that investors who had purchased Bitcoin more than two years ago are not keen to sell after the 40% drop.
Even miners, who sold during the May correction have since reversed their decision. The outflows from miner addresses are at the lowest level in seven months, which suggests that miners are holding on to their Bitcoin.
Veteran trader Peter Brandt believes that Bitcoin’s correction could extend below $30,000. Brandt said that every 50% fall in Bitcoin’s history has stretched to 70%. He also highlighted that according to past precedence, Bitcoin is unlikely to hit a new all-time high within seven months of a 50% correction.
However, PlanB, creator of the stock-to-flow-based Bitcoin price models, believes a further sharp fall below $30,000 is unlikely. He also remains positive on the prospects of Bitcoin hitting a new all-time high this year.
At the moment, analysts are divided in their opinion on Bitcoin’s short-term price action. Let’s analyze the charts of the top-10 cryptocurrencies to determine the path of least resistance.
Bitcoin continues to trade inside a symmetrical triangle pattern as the bulls and the bears battle it out to establish their supremacy. Although the symmetrical triangle generally acts as a continuation pattern, it is difficult to predict with certainty until the price breaks out of the triangle.
The downsloping moving averages and the relative strength index in the negative territory suggest that bears have the upper hand. If the BTC/USDT pair breaks below the triangle, the bearish momentum could pick up. There is a minor support at $28,000 but if that also cracks, the pair could retest the $20,000 level.
This negative view will invalidate if the bulls push and sustain the price above the resistance line of the triangle. If that happens, it will suggest that bulls have overpowered the bears. The pair could then attempt a rally to the 50-day simple moving average ($49,201).
This level may again act as a stiff resistance but if the bulls propel the price above it, the pair will signal that the downtrend could be over.
Coinbase Pro, the professional trading arm of the Coinbase cryptocurrency exchange, has begun accepting inbound transfers for Dogecoin (DOGE), setting the stage for wider adoption of the meme-based digital asset.
Trading of DOGE will go live on Coinbase Pro on Thursday at 4:00 pm UTC, provided that liquidity conditions are met, the exchange announced Tuesday afternoon.
Starting today, inbound transfers for DOGE are now available in the regions where trading is supported. Traders cannot place orders and no orders will be filled. Trading will begin on or after 9AM PT on Thursday June 3, if liquidity conditions are met. https://t.co/sFYODy4Xma
Initially, DOGE will be supported across five trading pairs, including DOGE/USD, DOGE/BTC, DOGE/EUR, DOGE/GBP and DOGE/USDT. Order books will launch in three staggered phases, beginning with post-only, followed by limit-only and then full-trading.
“If at any point one of the new order books does not meet our assessment for a healthy and orderly market, we may keep the book in one state for a longer period of time or suspend trading as per our Trading Rules,” Coinbase said.
The price of DOGE appears to have responded positively to the news, gaining more than 3%, according to TradingView. Of course, such gains pale in comparison to the exponential rise for the meme-based cryptocurrency through the first five months of 2021.