"Bitcoin's fall is justified". What will happen to the cryptocurrency below $30k
On 20 July, the price of the first cryptocurrency fell to $29.5k for the first time in a month. Should we expect the digital coin to continue to fall in price in the near future?
On the morning of Tuesday, July 20, the rate of bitcoin on the cryptocurrency exchange Binance fell below $30 thousand for the first time in a month. Quotes of the first cryptocurrency fell to $29.5 thousand. At 12:40 Moscow time, the digital coin is trading at $29.8 thousand.
Bitcoin rate is affected by two factors - the ban on mining in China and the subsequent drop in network complexity after the shutdown of a significant portion of computing power, explained the director of the cryptocurrency exchange service Alfacash Nikita Soshnikov.
On 19 July, another recalculation saw bitcoin's mining complexity drop by 4.81% to 13.67 trillion hashes (T), according to BTC.com. This is the minimum since January 2020. Since mid-May, when the difficulty of mining the first cryptocurrency reached an all-time high of 25.05 T, the decline has been even greater, down 45%.
According to Soshnikov, there has also been troubling rhetoric around tougher regulation of staplecoins and cryptocurrencies in the US - the need to develop a regulatory framework for coins whose exchange rate is pegged to physical assets has already been talked about by US Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell.
The market has been under constant bearish pressure over the past few days, says CEX.IO Broker head of data analysis Yuri Mazur.
"Bitcoin is now in a fairly aggressive information environment, with no positive infos around it right now. Therefore, from both a technical and fundamental point of view, the decline looks justified," Mazur said.
No recovery before autumn
Now the most probable scenario is further movement towards $25,000, as there are no positive drivers in the market, says CEX.IO Broker's Mazur. The expert admits that speculators and institutional investors may become more active in the range of $25-29 thousand, which may cause a "bounce" of the exchange rate.
According to Nikita Soshnikov from Alfacash, in August, bitcoin may fall to $23-25 thousand. Computing capacity in the bitcoin network after the move of Chinese mining companies should be restored by the end of September - before that it is unlikely to wait for the growth rate, he said. At the same time, a new cycle of bitcoin growth is possible in the fall and by the end of the year the coin may return to the levels of $50-60 thousand, Soshnikov admits.