Crypto Daily: Halving Event Trimmed Trading Volumes, Hashrate Down 41%

It’s been a week since Bitcoin halved its block reward for the third time in history, and we can now observe substantial changes related to the characteristics of its blockchain. While not directly, those changes can help us recognize future price movements.

First off, the hash rate. Right before the halving event on May 11, the total power of the Bitcoin network reached a record high of 136 E/hashes per second. Less than a week later, it plunged 41% to 81 E/hashes per second.

Not long ago, we predicted such a decrease of the hash rate associated with the lower break-even levels of miners. The reduction of the block reward has forced many miners to shut down operations, and some of the switched to more profitable alternatives, like Bitcoin Cash and Bitcoin SV. As seen in the chart below, the hash rate for the aforementioned forks rose sharply following the Bitcoin Halving event.

The use of the Bitcoin blockchain is also subject to some interesting changes. For example, the number of transactions on the blockchain dropped by 30% from 345,000 to 236,000 per day. Moreover, the number of unique addresses in the Bitcoin blockchain has also decreased by 27% from 700,000 to 496,000.

But… how these changes affect the price of Bitcoin? In short, these changes point to a significantly lower interest in the world’s top cryptocurrency. Many people rushed into Bitcoin ahead of the halving event in hopes of rapid growth. And since Satoshi’s currency is expected to extend its way south, there’s little to no stimulus for trading. That’s exactly why trading volumes remain very low.

The Bitcoin price chart clearly shows that a break above $10,000 is not possible for the moment. There have been several attempts to break through that psychological mark, but the bearish pressure intensifies as soon as BTC approaches it. That said, the recommendation remains unchanged: short positions with a target in the $8,000 — $7,000 range.