Did China Crash Bitcoin?: Broker’s Beat Volume #62

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Welcome to the 62nd issue of the Broker’s Beat. This week, we analyze what caused Bitcoin’s price to drop in the last week and look at what experts are saying about the next few months.


BY THE NUMBERS

gain
loss
market

SNIPPETS

US bitcoin miners doubled their power consumption in four months

Source: QZ

“Between April and August, the US’ share of global computing power devoted to mining bitcoin more than doubled, from 17% to 35%, as miners looked to relocate from China after the government there began cracking down on cryptocurrency.

To the roots of mining: Bitcoin going green faster than ever

Source: CoinTelegraph

“There’s no denying that over the past couple of years, the narrative that Bitcoin (BTC) consumes too much power has continued to garner an increasing amount of mainstream traction. However, what sometimes gets ignored is that in recent months, an increasing number of Bitcoin miners have moved toward the use of power sources driven primarily by renewable energy.”

Bitcoin Miner Iris Energy Files for $100M IPO 

Source: BeInCrypto

“The mining company is a Bitcoin mining company that builds and operates data center and electrical infrastructure for the mining of bitcoin using renewable energy sources. Iris energy will list on the Nasdaq under the ticker IREN. The company confidentially submitted a draft registration statement on Form F-1 with the U.S. SEC in late August 2021.“

AGM Group Announces Strategic Partnership with Meten for Blockchain and Cryptocurrency Mining Business

Source: NewsBTC

“AGM Group Holdings Inc. (“AGMH” or the “Company”) (NASDAQ: AGMH), an integrated technology company focusing on providing fintech software services and producing high-performance hardware and computing equipment, today announced it has entered into a strategic partnership with Meten Holding Group Ltd.“

Is China About to Reverse Its Bitcoin Mining Ban? Here’s What’s Really Going On

Source: Decrypt

“Today, Crypto Twitter influencers and media began circulating rumors that China was regretting its crackdown on crypto after Bitcoin surged to new all-time-highs in the past week. As has been well documented, China’s Bitcoin mining ban caused an exodus of miners out of China, which once controlled more than 50% of Bitcoin’s global Bitcoin hashrate.”


INFLOW/OUTFLOW MONITOR

It hasn’t been a great week for Bitcoin as we witnessed a slight decrease in the price from the previous week, where it rose to $66k on Oct. 20, 2021. It had surpassed its all-time high record of $64k and is currently pegged at $58.45 as of Oct. 27, 2021. 

The BTC/USDT spot price dropped from $62.2k on Oct.21, 2021, to $58.45 on Oct. 27, 2021. The sudden fall in the price of Bitcoin is attributed to heavy point bookings by BTC investors but experts. However, anticipate a rise in the days ahead. 

1

The Bitcoin reserves chart above shows a drop in the value of Bitcoin reserve from 2.37M to 2.34M between Oct. 21, 2021, and Oct. 27, 2021. A reduction in the value of Bitcoin reserve across all exchanges shows a decrease in BTC supply for trading. It also signifies that there were fewer altcoins available for processing. The overall effect of this chart shows that exchangers had less amount of BTC in their wallets during the week in review.

2

The chart above shows that the BTC outflow value decreased 64.2K on Oct. 21, 2021, to 34.7K on Oct. 27, 2021. A reduction in the BTC outflow value shows a decrease in the transfer of Bitcoin from the wallet of exchanges to external hardware wallets. It also shows that there is an increase in BTC selling pressure between the periods in review.

3

The Bitcoin all miners outflow chart summarizes Bitcoin’s miners’ behavior after the crypto China ban. From the chart above, it is clear that irrespective of the steady increase in Bitcoin spot price against USDT from the inception of the ban in May 2021, the value of miners’ outflow has not shown any considerable improvement. Instead, it has reduced from 2.3k to 1.9k between Oct. 21, 2021, to Oct. 27, 2021.

The decreased value shows a reduction in the amount of Bitcoin transferred from the wallets of Bitcoin miners. It signifies that Bitcoin miners prefer holding their hard-earned Bitcoin rewards.


TRADER’S DIGEST

Although the spot price of Bitcoin has increased tremendously in recent weeks as experts predict that the bullish race may continue as we approach the end of the year. But the turn of events in this week shows otherwise as Bitcoin price dropped significantly from $62.20k on Oct. 21, 2021, to $58.45k on Oct. 27, 2021.

The price of Bitcoin hovered around $60k on Wednesday but has since dropped to $59.43k. The drop in the price of Bitcoin comes a week after BTC hit an all-time high of $66.97k last Wednesday. However, experts believe that the fall in the price of Bitcoin does not negate the fact that BTC is still very much strong since it increased from $40,000 in September.

Before the recent surge in BTC spot price, the sudden drop in its value was attributed to the crypto transaction ban by China’s apex bank, which announced that cryptocurrency activities in the country were illegal. The bitcoin price topped $52,000 in the first week of September but dropped and had continually struggled to increase beyond $50,000 until October. Although Bitcoin has witnessed ups and downs in its price, it has majorly witnessed a rise since its very low value of $30,000 in July.

In April. 2021, BTC hit over $60,000, and with the current price movement, it demonstrates a considerable level of volatility as more people are showing interest in joining the action. Between its low points in July and its high point in October, the price has steadily increased. It has recorded several daily highs of over $55,000.

However, experts believe that as we approach the end of 2021, the price of Bitcoin may experience a heavy boost. It is believed that the mass adoption of BTC in the coming months will orchestrate a rise in cryptocurrency. It is predicted that Bitcoin may show a stronger capitalization, and we may expect to see a more concrete increase in the value of bitcoin over the coming weeks.

The expected boost in BTC value is hinged on the ProShares BTC Futures ETF acceptance. As investors await a debut of ETF and Bitcoin futures, including Melanion BTC Equities Universe. This was established by a French investment firm and the participation of Valkyrie’s Bitcoin strategy, we predict a stronger BTC value in the coming weeks.

The total cryptocurrency market capitalization attained an all-time high of $2.3T trillion as of Oct.21, 2021, with Bitcoin making a significant contribution of about 1.1billion with a spot price of $58.45k on Oct. 27, 2021. Ethereum, on the other hand, dropped from $4,375 on Oct. 21, 2021, to $3,923 on Oct. 27, 2021. The crypto market capitalization shows that Bitcoin has a 47% dominance of the crypto market, which is predicted to increase as we see a higher increase in investors.


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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