Bitcoin crashes below $30,000 for the second time in less than a month.

The flagship cryptocurrency, Bitcoin has broken below the $30,000 support zone to trade currently at $29,600 on the back of diminishing institutional demand for the crypto asset, a further drop in the mining hashing rate and negative adjustment of mining difficulty.

The cryptocurrency market crash in May has led to a significant reduction in the interest from institutional investors, who now appear to be in risk management mode as BTC price struggles to climb higher.

Evidence of the decline in interest can be found by looking at the market price of GBTC, which continues to trade at a -15.3% discount and by observing the net inflows to the Purpose ETF which has slowed down significantly. Data from Glassnode shows that the ETF saw a net outflow of -90.76 BTC, which is its largest outflow since mid-May.

Since China’s crackdown on cryptocurrencies and mining activities, Bitcoin’s hash rate has been on a downtrend. More than 54% of Bitcoin’s hash rate has dropped off the network since its market peak in May.

Because of this, the Bitcoin code has been re-calibrated to make it 28% less difficult to mine. According to BTC.com, this means that it is getting easier to mine the crypto asset and it has led to the fourth consecutive negative adjustment in the Bitcoin mining difficulty by 4.8%, a figure which has fallen by almost half since mid-May when Bitcoin’s price crashed nearly 50%.

Although this may mean more money for miners, it also indicates a security issue for the bitcoin blockchain and investors are reacting to it.

On-chain analytics suggest that there has been an increase in deposits of BTC to exchanges. This figure continues to rise with more than 28,700 BTC, the largest inflow in over a month and a half, taking place on July 16th.

This is a bearish indicator as it is believed that when BTC is moved to exchanges, it indicates a possible sell-off.

About admin

Check Also

INEC: multiple court orders, verdicts threat to 2023 polls.

The Independent National Electoral Commission (INEC) has called on the leadership of the Judiciary and …

Leave a Reply

Your email address will not be published. Required fields are marked *