Last Friday, the cryptocurrency market took another hit, but after that, prices generally seemed to hold up and find a new bottom. At least that’s what the market looked like yesterday and this morning, but shortly after the publication of today’s update, the prices took another heavy blow.
Why is the market falling?
One of the factors contributing to the price declines may be the currently falling hash rate of Bitcoin (BTC). Several large Chinese mining farms have recently been closed, including those in Sichuan province. Chinese miners normally get cheap electricity from the local hydroelectric plant in this province during the rainy season, but were recently cut off from the energy grid. According to Bitinfocharts, the hash rate dropped to 95 exahashes per second (EH/s) on June 19, while on May 14 it was still around 170 EH/s.
Concerns about the so-called death cross may also play a role and cause panic. The death cross is when the 50-day moving average (MA) of the bitcoin price crosses the 200-day MA and that is often accompanied by a falling price.
Another major factor that may play a role can be found with the large asset manager Grayscale Investments. According to Bybt.com, on June 22, a whopping 9,600 BTC will be unlocked from the fund that has been locked up for six months. At the beginning of July, that will be even larger amounts and investors are uncertain what will happen with this.
In recent hours, the total market cap has fallen from $1.51 trillion to $1.44 trillion and many prices are now down 10% or more from 24 hours ago. The price declines led to liquidations of as much as $350 million in the past few hours, according to data from Bybt.com.
How far will the prices fall?
Bitcoin’s key support zone around that $35,000 held up yesterday, but finally broke down this morning. At the end of the morning, the bitcoin price plunged 5.6% from $35,400 to $33,400. We see trading volume pick up slightly which may mean buying the dip, but it remains relatively low and that could also mean we’re looking for the next support around $33,000 and $31,000.
Ethereum (ETH) took another blow harder than bitcoin, just falling from $2,200 to $2050, a 6.8% drop. The ether price is now even 8% in the negative compared to 24 hours ago. The same goes for Cardano (ADA) and Binance Coin (BNB).
Dogecoin (DOGE) and Ripple (XRP) are falling even harder. The DOGE price is no less than 11% in the minus and just came in at $ 0.26. XRP is even down 11.5% and just dived below $0.70.