New power outages in China put pressure on Bitcoin - Kakiforex | Forex markets for the smart money. New power outages in China put pressure on Bitcoin New power outages in China put pressure on Bitcoin

May 20, 2021

New power outages in China put pressure on Bitcoin

 Bitcoin prices sank during the third trading day of the week to the level of $39,000. As mentioned in previous articles, this is far from the limit of the fall of bitcoin. The cryptocurrency may well fall to the level of $30,500 soon. If before May 10, many investors and traders (mostly large ones) regarded the fall of the first cryptocurrency as a correction, after which the upward trend will inevitably resume, now many people seriously believe that the upward trend is over and now bitcoin can fall very low and spend the next few years at these levels.

Given the fact that the average purchase price of bitcoin by Microstrategy (according to its own statements) is $25,000, the more bitcoin falls, the less profit the company will receive. Moreover, 90,000 coins still need to be sold to make a profit, which is not so easy in a falling market. Other investors made purchases and much higher than the level of $25,000 because it was due to the influx of new investments that bitcoin showed an increase to $60,000 per coin. These investors are already taking losses. Meanwhile, Microstrategy seems to have completely decided to abandon its main activity of developing analytical software and is buying up bitcoins in bundles. This time, the company announced an investment of another $10 million. As you can see, this operation did not stop the market decline.

Meanwhile, news from China reported another power outage in the Sichuan province on May 17. As a result, the computing power of the network fell by 20%. Recall that this is not the first time that the hash rate of the network falls due to power outages in China. It is in China that the largest number of mining capacities in the world is concentrated, so any interruption in their work negatively affects the entire network, the hash rate, and the cost of the bitcoin itself. Thus, any accident at coal mines or simply a shortage of coal for power plants in China may well trigger a drop in the price of bitcoin and other cryptocurrencies.

Plus, do not forget that recently Elon Musk has become more active again, who began to comment on bitcoin as if it were his own cryptocurrency, causing a drop in the bitcoin exchange rate, and at the same time a drop in the value of Tesla shares. The crypto community is enraged with Musk and has even created a new cryptocurrency "F*CKELON", which is a protest against Musk's uncontrolled tweets regarding cryptocurrencies. Musk is now called a market manipulator, and many experts believe that if the sphere of cryptocurrencies was regulated in the same way as the sphere of securities, then Musk would have already gone to prison for market manipulation.