- Bitcoin recovery has stalled on approach to $4,000 handle.
- Hash rate is falling signaling worsened market sentiments.
Bitcoin is hovering around $4,000 handle during quiet Asian hours, unable to perform a clear breakthrough. The indecision and lack of follow-through mean that the recovery may be short-lived and the coin will resume its rueful trip to the South rather sooner than later.
A move below $4,000 during the weekend had a strong psychological effect on the crypto crowd and forced many speculators to flee the market, which is confirmed by reduced trading volumes. Some experts think that this development is positive for the industry in the long-term, as it clears the market from random people.
However, the purification process is pretty painful not only for traders but also for miners, the guys that use their computers to generate new coins by solving complex equations.
The amount of computing effort known as the hash rate dropped to 34.7 EH/s on November 21 as lots of miners were winding down their business to stop losses.
“Bitcoin’s value is always driven by the intensity of demand and supply. If the miners stop mining, bitcoin will not function…and the overall market will lose confidence. If there is no confidence, people will freak out and sell even more,” Edith Yeung, a partner at 500 Startups, an early-stage venture fund, explained.
The hash rate recovered to 47.2 EH/s on weekend but resumed the downside on Monday despite the upside correction on the cryptocurrency market.
BTC/USD, the daily chart