Bitcoin is falling as purchases slow and USD recovers

Mohammed Abdelkhalik
August 26, 2020

Ad Disclosure

Bitcoin lost nearly 5% during last week’s trading, while rest of top ten Altcoins lost between 6% – 12%, as total value of cryptocurrency market declined by $ 16.7 billion during past seven days.

Bitcoin breached support levels between $ 11,400 and $ 11,600, at any time price will be between these lows, the currency is expected to resume upward trend, however if selling pressure continues, it is likely to break critical support level of $11200 and return to the downside.

Some consider BTC decline to resemble calm before the storm, as prices are expected to witness huge movements in coming period.

Bitcoin buying pressures falter

A strong bullish trend has dominated Bitcoin over past few months, as BTC rose from its multi-month lows from $ 8,000 to the highest of $ 12,400 set just over a week ago.

Although the overall trend was in favor of Bitcoin, it is currently showing some signs of weakness due to its inability to maintain above the $12,000 level.

$12,000 level has remained steady as a resistance level for several weeks and words breached proved to be ephemeral, and recently Bitcoin failed to maintain $ 12,400 level which pushed it lower to current price levels.

Bitcoin is currently trading at $11,400, which is a significant drop from recent highs, and it remains unclear whether or not this level will continue to hold.

Mining difficulty has risen 9% since the halving happened

According to reports, mining difficulty increased by 9% since after halving event that took place on May 11, after the halving happened, the currency faced a lot of criticism as some said that miners would give up and whole process would go into a death spiral, however, and after three months hash rate reached Bitcoin has reached a record high, in a positive sign of Bitcoin’s long-term trend.

The data indicated that difficulty of mining bitcoin rose by 3.6% on August 24, and data shows that many miners are actively mining even before halving occurred, and Bitcoin hash rate increased as a result of profitability of miners in China, on the contrary, it is considered Miners are one of external selling pressure sources on BTC price.

This third-half BTC event supported general investor sentiment as well as unwavering confidence of miners in  prospects for first cryptocurrency.

The third half not only has a positive effect on market sentiment but also pushes into account potential gains. The largest cryptocurrency has shown impressive growth rates over past two halves, but how will it go this time?

Charts show several scenarios similar to those that occurred in past two halves, and within these scenarios growth could reach $340,000 – $720,000. Of course, analysts admit that such accounts are nothing more than just hope.

Author Mohammed Abdelkhalik

Professional Trader and Analyst, economist in Financial and Forex market since 2004.holds an MBA from the American University in Egypt. Mohammed works as an economic writer and technical & fundamental analyst for many international Forex and financial trading companies in both English and Arabic on a daily basis.