Why bitcoin is still unable to consolidate above $50 thousand.

The main cryptocurrency rose in price by 33% in a month. Experts explained what factors prevent the digital coin from returning to the levels at which it was trading at the beginning of May

On September 2, the value of the digital coin again exceeded $50 thousand. For now, the cryptocurrency is trading in a narrow range of $50.2-49.7 thousand and can’t get a foothold above the important mark. RBC Crypto experts explained what holds back the rate of the main cryptocurrency from further growth.
Bitcoin

Psychological mark and fears

For bitcoin, the level of $50 thousand – is a kind of psychological mark, which requires a strong trigger to overcome, said the head of the analytical department of AMarkets Artem Deyev. In his opinion, the arrival of large institutional investors or easing of restrictions concerning cryptocurrencies in China can become such a trigger. But while there is no such news, bitcoin has no stimulus to overcome 50 thousand.

In July, all Chinese provinces imposed a ban on cryptocurrency mining. Because of this, about 90% of miners left the territory of China. The migration of miners from China provoked the largest drop in the hash rate in the history of bitcoin. In June, the amount of computing power used to mine the first cryptocurrency dropped by more than 50%. At the end of July, the hash rate began to recover, and the mining complexity showed growth for the first time since May.

According to Bitinfocharts, the bitcoin hash rate is 116 Eh/s (exahesh) on September 2. The figure is up 70% after falling to a local low in June. At the time of the last recalculation (August 26) the mining complexity rose to 17.6 T (terraches). In June, the mining difficulty was down to 13.6 T.

Investors may be cautious about bitcoin because of Taproot’s planned bitcoin blockchain updаte in the fall, according to CEX.IO Broker head of data analysis Yuri Mazur. This could be a deterrent, he said, as market participants fear a postponement of the updаte or network glitches.

“These worries keep the bullish sentiment from materializing. Nevertheless, a successful release of the Taproot updаte will be a strong trigger for bitcoin movement”, Mazur noted.

Taproot is expected to be released this November. The updаte will expand blockchain functionality by introducing smart contract technology.

Bitcoin’s decline in share

Bitcoin’s share of the crypto market fell by almost 5% in August. The reason is that investors are looking for higher returns in other instruments, Deev explained.

“Now high returns promise not so much bitcoin, but Ethereum and other alternative coins”, said the head of the analytical department of AMarkets.

A similar situation was observed before the collapse of the crypto market on May 19, when the value of bitcoin fell by a third in a day and fell to the $30,000 mark for the first time since January. Between March and mid-May, the share of the main cryptocurrency fell by almost 20%.

There is no need to fear another collapse, because at the moment the market is dominated by other dynamics, said Mazur. According to him, the main prerequisite for the May correction was the overheating of digital assets, now cryptocurrencies do not show new historical highs.

“Before showing growth, Ethereum and Cardano were in a fairly wide sideways range, indicating an accumulation of directional positions – and they are bullish”.

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The post was written by Crypto Expert John Belford

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