Bitcoin Price Slides Below $8,000, Miner Capitulation to Blame?
By Blokkx Ltd. on Altcoin Academy
Blokkx Ltd. 2019
The Bitcoin rate slipped below the 8,000 US dollar mark again on November 21. With a weekly minus of almost eight percent, the short-term market situation is bearish. What are the reasons for the downward trend?
Hash rate declines, do the miners capitulate?
One of the catalysts for the current decline in the Bitcoin price is likely to be the emerging capitulation of the miners — the death cross described on November 15 was passed from a technical point of view. The moving average of the last month fell below that of the previous two months about the hash rate, and the increase in the number of mining companies was significantly slowed down. As it currently looks, the Bitcoin price is also following this trend and is moving downwards.
The standard interpretation: More and more miners seem to take their equipment off the grid, the “prospecting” of new BTC units no longer pays off for everyone. Miners, therefore, have to cash-out their sodden BTCs — which in turn can harm the Bitcoin price.
It should be noted, however, that no one knows why the increase in the hash rate is slowing down. This fact could be a Miner capitulation, but it is also possible that Miners will switch to the 7nm ASIC mining devices on a large scale. Such conversions in Bitcoin mining can also lead to a drop in the hash rate.
It should also be noted that a fall in the hash rate ribbon below zero did not always result in a price drop. Data from April 2015 and July 2016 prove this. Here the question arises whether one can speak of a Miner capitulation due to a rare data situation (since 2015 the Hash Rate Ribbon, including the current result, fell only seven times below zero). Of six previous events, only three hurt the Bitcoin price.
Technical Analysis of the Bitcoin Chart
Bitcoin rate, Bitcoin rate slips below $8,000: Miner capitulation to blame?
The Bitcoin exchange rate continues its bearish trend since the beginning of November and has now fallen below 8,000 US dollars. Thus, the price tests the support that gave way to the Bitcoin price between the end of September and the end of October — and was finally undercut on October 23.
Is this story repeating itself? Various indicators suggest that both the MACD and the RSI are sending bearish signals, confirmed by a high Aroon Down indicator. However, before opening a short position, investors should wait for a sustained drop below this support.
If the price falls below 7,744 US dollars, a short position with the first target of 7,356.30 US dollars and a stop loss of 8,124.79 US dollars is the best choice. If this target is reached, the situation should be reassessed, and the second target of 6,405.49 US dollars should be set.
A long position should only be considered if the price rises above the moving average of the last 50 days at 8,485.61 US dollars. Here one could venture a long position with a target of 9,485 US dollars and a stop loss of 8,296.91 US dollars.
Investor Sentiment in the Crypto Market
Even the general market sentiment in the crypto cosmos is not the best at the moment. The Crypto Fear & Greed Index paints a frightening picture:
Bitcoin price, Bitcoin price slides below 8,000 US dollars: Miner capitulation to blame?
This picture seems to confirm that — at least in the short term — the bears are entering the crypto market.
What will happen with the Bitcoin price?
If the miners capitulate, this can lead to a domino effect: If FUD spreads among miners and there is a threat of falling prices, this can lead to further sales and thus further losses in the Bitcoin price.
