China’s Futile Crackdown: Broker’s Beat Volume #59

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Welcome to the 59th issue of the Broker’s Beat. This week, we analyze the crackdown coming from China and how that’s affecting the hash rate and other metrics.


BY THE NUMBERS

gain
loss
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SNIPPETS

Ethereum Transactions Can Now Be Sent Privately. Here’s What This Means

Source: U.Today

“According to the official announcement by the Ethermine team shared in its social media channels, a novel feature of Private Remote Procedure Call Endpoint for Ethereum (ETH) mainnet has been added to Ethermine’s toolkit.”

Tehran bourse CEO steps down after discovery of illegal crypto mining in basement

Source: Forkast

‘Ali Sahraee, the CEO of Tehran Stock Exchange, has resigned after Iranian authorities recently busted an illegal crypto mining operation in the basement of the bourse building, according to a report by Iran’s state media.”’

Alibaba Bans Sales of Crypto Mining Equipment

Source: BeInCrypto

“The popular e-commerce platform Alibaba announced the ban in the wake of new crypto and mining bans in China. “

WHY ARE BITCOIN MINING ASIC PRICES SURGING AND WHERE WILL THEY GO NEXT?

Source: Bitcoin Magazine

“The prices of ASICs, computing components central to Bitcoin mining, have surged this year. But why? And where will they go next?”

Washington County orders BrightRidge to shut down its Bitcoin mining farm in 30 days

Source: Finbold

“United States electricity and internet service provider BrightRidge has been ordered to shut down its Bitcoin mining facility within 30 days by Washington County authorities.”


INFLOW/OUTFLOW MONITOR

Anxiety and several other emotions are beginning to flood the minds of traders as we’re at the end of the third quarter of the year and prepare to head into Q4. The price value for BTC has consistently traded in a sideways pattern for the past few weeks as new support and resistance levels were made based on the overall market sentiments. We’ll take a look at the charts illustrating the amount of BTC transferred between exchanges’ wallets and external cold storage wallets owned by traders.

After reaching a new resistance price level of 44K on Sept. 23 2021, there was a dip in Bitcoin to a support level of 41K on Sept. 29 2021. Although the market is now recovering to 43K, let’s discuss how the supply and demand for BTC varied with respect to price movement during the past week.

1 1

The chart above illustrates the BTC reserve amount for all exchanges. Notice how the Bitcoin reserve falls from 2.39M BTC to 2.37M BTC during the dip we witnessed from Sept. 22 to Sept. 29. This means that fewer traders were willing to trade their Bitcoin for alt coins and preferred to hold on to them in their external wallets rather than do so in their exchanges’ wallets.

2 1

By taking a look at the BTC netflow chart for all exchanges as shown above, there was a consistently negative value for this metric from Sept 22 to Sept. 29 2021. This means that during this period, Bitcoin inflow into exchanges was less than the amount flowing out of exchanges. This means there was a decrease in the supply of Bitcoin for trading and purchasing other alt coins, as traders preferred to transfer their BTC holdings to external wallets.


HASHRATE ANALYSIS

Bitcoin mining network hashpower value has moved sideways in the past few weeks. There was yet another China crypto crackdown on Sept. 24 2021 as China announced another ban on all crypto transactions within the country. As we already know, the China crypto ban that happened in June 2021 caused miners to emigrate from the country to seek other greener mining locations for their mining operations.

China has also vowed to hunt down any remaining miners in the country and bring a total halt to any such operations. The reason behind this sudden ban is because China is about to launch its Central Bank Digital Currency and seeks to eliminate any competition from other cryptocurrencies as much as possible. There are traders who believed that this was the cause of the Bitcoin dip, as the ‘China FUD’ broke the internet.

3

From the hashrate chart shown above, we see a rise in the total hashrate value from 134.5m TH/s to 139.9m TH/s. We expect a rise in its value in the coming days.


TRADER’S DIGEST

The past week was a hopeful one for traders where many expected the BTC/USDT price to hold support at 41-42K prince range. Despite the China FUD that caused a bearish move, there’s other big news that projects a beam of hope for bullish days as we head into Q4.

Large institutions have started to accumulate Bitcoin and Ethereum in their private wallets. This was reported by crypto analysts during last week despite the crypto market dip. Going forward, we also expect a Bitcoin ETF to be launched this October.


That’s all for this week! If you have any questions about what we talked about here or would like to explore trading with us, let’s get the conversation started.

Happy trading!

The Secure Digital Markets Team

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