On the penultimate day of the week, the cryptocurrency market shows a moderate decline. Bitcoin has lost almost 5% in the last 24 hours and is trading around $33,500. Thus, the recent price rebound has been almost completely offset. Failure to cross the $40,000 threshold translates into increased bearish pressure. As before, the phrase "what does not grow, falls" is extremely relevant for the crypto market. So far, the scale of decline is not critical for the market, and a fall down to $30,000 will not mean the reversal of a broad trend. But if we see a fall to $29,000 or lower, it might well trigger a panic sell-off. But remember: the stronger the panic sell-off, the more aggressive the bargain hunters will be with buying.
The last episode of a sell-off in the cryptocurrency market during the last quarter was due to tough actions by regulators, the emergence of fears of a possible stimulus policy rollback, loud populist statements about bitcoin not being green, and a decline in institutional demand for digital currencies.
The bitcoin network's hash rate has stabilized after a long period of decline due to miners' migration and shutting down equipment. Market participants suggest that the toughest moment after the Chinese authorities' statement about the need for miners to curtail their activities in China has passed. At the moment, the computing power of the network is far from its peak values but no one doubts that soon miners will turn their equipment back on and the hash rate will begin to grow. This situation will bring to the crypto market a more significant diversification of computing power. The distribution of miners' plants around the world but for China and the loss of control over Bitcoin computing power could have unpleasant consequences.
Still, the country's authorities should have kept the competitor as close as possible, rather than creating conditions to make the asset even more globally attractive. After all, the more decentralized Bitcoin is, the higher its value in the long run. The relevance and need for Bitcoin is only growing as the financial conditions tighten around the world's economies. The world economy has very quickly gone from total globalization to a global trade war. Central banks' policies have created Bitcoin, which has undoubtedly become one of the iconic symbols of the new era and has the potential to become a stand-alone economy.
