It’s a 'Matter of Time' Before Bitcoin Dips Below $6,000, Analyst Claims

Francisco Memoria

According to some traders, bitcoin’s mining costs saw it bottom out at the $6,000 mark as its months-long bearish trend supposedly came to an end. An analyst now argues it’s only a “matter of time” before the flagship cryptocurrency dips below said mark.

Through a blog post spotted by MarketWatch, Ziedins of CrackedMarket noted that while BTC has seen the $6,000 mark represent a firm support it bounced off of  numerous times in the past six months, every time it bounced it achieved a lower high.

Analysts usually see an asset in a bearish or at least neutral trend if it fails to achieve higher highs after bouncing off support levels. Ziedins stated:

First, we bounced to $17k. Then it was $12k. $10k came next. After that $8.5k. Earlier this month it was $7.5k and this weekend we stalled $6.8k. At this point, it is only a matter of time before we tumble under $6k support.

Bitcoin has been dropping since mid-December, after it hit an all-time high of nearly $20,000. This, despite numerous positive developments, which include the owner of the New York Stock Exchange (NYSE), the Intercontinental Exchange (ICE), launching a “global platform and ecosystem for digital assets” called Bakkt.

At press time, according to CryptoCompare data, bitcoin is trading at $6,450 after gaining 0.03% in the last 24-hour period. In the last 12 months, it’s still up by 65%.

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Most other cryptocurrencies have also been struggling. The XRP token has lost 2% of its value in the last 24 hours and is trading at $0.51, while Ethereum’s ether slipped 0.3% to $211. A few altcoins like EOS and LTC are marginally up.

Bitcoin cash (BCH) is notably been pushing the market up after rising 18% to $523. Some analysts believe the cryptocurrency’s price has been rising after Bitmain, a large BCH investor, filed for an application to launch an Initial Public Offering (IPO) on the Stock Exchange of Hong Kong Limited (SEHK).

While most cryptocurrencies are down so far this year, Wall Street analyst and bitcoin bull Tom Lee has earlier this month revealed he created an “altcoin correction index” that was at an all-time high. Per Lee, the last time it hit a new high, altcoins enjoyed a 7-week bull run.

Lee, the co-founder of Fundstrat Global Advisors, has been maintaining a $25,000 by the end of the year bitcoin price prediction throughout the bearish trend. The analyst has in the past used historical evidence to argue hodling makes sense, as the cryptocurrency sees most of its gains in only a few days every year.

Bitcoin Mining Difficulty On Pace for 60% Growth in Q3 2019

  • Bitcoin mining difficulty continues to rise, on pace for 60 percent growth in Q3 2019.
  • BTC has average 42 percent quarterly growth over the last three years. 

Bitcoin miners appear even more bullish on the cryptocurrency entering the final quarter of the year, with difficulty on pace to grow 60% in Q3 2019. 

Bitcoin Mining Difficulty Q3 2019

According to analyst Kevin Rooke, bitcoin mining difficulty has been growing on average 42% per quarter over the last three years. However, the current quarter is shaping up to be an anomaly. Rooke projects that BTC’s hash rate will be up more than 60% by the end of Q3 2019.

Mining difficulty has historically been used as an indication of the amount of computing resources being put towards securing bitcoin’s network. In addition to facilitating transactions on the blockchain, the hashrate also provides a glimpse at the competition between miners to receive block rewards in the form of newly minted BTC. It can also be used as a proxy for the network’s growth and decentralization.

As the difficulty increases, so does the competition for BTC, which has led some analysts to use hashrate as a bullish indicator. Miners are forced to commit more resources to the network, which drives up the price at which they are willing to sell newly minted BTC, as opposed to dumping it into the market. 

In August, bitcoin bull Max Keiser predicted that the meteoric rise in network difficulty would lead to an increase in BTC’s price. More recently, crypto analyst PlanB calculated BTC's price reaching $31K by 2021 based upon mining difficulty. 

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