Bitcoin extended losses and traded below $20,000 against the US Dollar. BTC could revisit the key $19,500 support zone, where the bears might be tested.

• Bitcoin is following a bearish path below the $20,500 pivot level.
• The price is now trading below the $20,500 level and the 100 hourly simple moving average.
• There was a break below a major bullish trend line with support near $20,500 on the hourly chart of the BTC/USD pair (data feed from Kraken).
• The pair might find support near the $19,500 and $19,350 levels.

Bitcoin Price Extends Losses

Bitcoin price started a fresh decline after it failed to stay above the $22,000 level. There was a steady decline below the $21,200 and $21,000 levels.

The price moved below the 61.8% Fib retracement level of the upward move from the $19,301 swing low to $22,500 swing high. Besides, there was a break below a major bullish trend line with support near $20,500 on the hourly chart of the BTC/USD pair.

Bitcoin price is now trading below the $20,500 level and the 100 hourly simple moving average. It even settled below the 76.4% Fib retracement level of the upward move from the $19,301 swing low to $22,500 swing high.

However, there is a major support waiting near $19,500. On the upside, the price could resistance near the $20,000 and $20,150 levels.

Source: BTCUSD on TradingView.com

The next key resistance is near the $20,500 zone (the recent breakdown zone). A close above the $20,500 resistance zone could set the pace for a test of the 100 hourly simple moving average. Any more gains might open the doors for a move towards the $21,750 level. The next major resistance sits near the $22,000 level.

More Losses in BTC?

If bitcoin fails to start a recovery wave above the $20,150 level, it could continue to move down. An immediate support on the downside is near the $19,580 level.

The next major support now sits near the $19,300 level or the last swing low. A close below the $19,300 support zone could accelerate losses. In the stated case, there is a risk of a move towards the $18,500 level.

Technical indicators:

Hourly MACD – The MACD is now gaining pace in the bearish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now in the oversold zone.

Major Support Levels – $19,600, followed by $19,300.

Major Resistance Levels – $20,150, $20,500 and $21,750.

The decline of bitcoin over the last several weeks has raised concerns among investors in the space. The digital asset which had peaked at $69,000 had declined as low as $17,600 and continues to struggle to hold $20,000, dragging investor sentiment down with it. This same sentiment was shared by a polled group of Wall Street investors regarding how they viewed the digital asset. Mostly, investors do not see any bullish movement in the near future.

Majority Says Bitcoin Is Going Down

Out of the 950 respondents that were surveyed by MLIV Pulse, the majority revealed that they were not expecting any significant recovery for bitcoin. The digital asset is currently trading above $20,000 but these investors believe that it will likely crash further. A total of 60% of all respondents said they expected the price of bitcoin to actually decline to $10,000. Furthermore, they believe that this price point is more likely compared to the digital asset’s price hitting $30,000.

Related Reading | Decline In Bitcoin Miner Revenues Suggests More Sell-Offs May Follow

This same school of thought has been echoed by many in the space, especially on social media. However, it was not the only sentiment that was present in the investors surveyed. Despite the majority feeling the digital asset would succumb further to the bear market, there were still some who believed that there are more positive things coming.

The remaining 40% of the survey pool gave their more bullish predictions. This section of the pool admitted that they expected the price of bitcoin to actually hit $30,000 before it will hit $10,000. Interestingly, the large majority of investors with positive reviews of the cryptocurrency were the more seasoned investors.

BTC trading at $20,546 | Source: BTUCSD on TradingView.com

These professional investors were more likely to believe that cryptocurrencies are the future and even when they were not investors and remained skeptical, they were more open-minded towards cryptocurrencies compared to their less experienced counterparts.

Is $10,000 Possible?

Given how the previous bitcoin bear markets have gone, it is no surprise to see that the majority of investors actually expect the price of the digital asset to fall to $10,000 before it makes any major recovery. A historical look shows that bitcoin has consistently lost more than 80% of its all-time high value in every bear market and if it continues to follow this trend, then $10,000 remains a likely level to hit.

Related Reading | Bitcoin Drops Below $22,000, Is Peter Brandt’s Analysis Still In Play?

However, it is important to note that bitcoin has deviated severally from ‘established’ trends that have become associated with it. One is the multiple bull rallies of 2021, the likes of which have never been seen before. It had brought more interest to the space and in turn, brought more money which is more likely to hold up the price.

Another thing is that the price of the digital asset has fallen below its previous cycle high, although this is more bearish than bullish for the future of the digital asset. Nevertheless, it’s a sign of the continued deviations and there remains a possibility that not losing 80% of its all-time high value is another deviation bitcoin might make.

Featured image from Forbes, charts from TradingView.com

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The crypto winter keeps spreading to all sectors of the industry, especially resulting in Bitcoin failing to climb. Besides investors losing their funds due to price crashes, companies also downsize their workforce. Some other crypto firms declared bankruptcy, and many stopped some services to fight liquidity issues.

At a point, many miners also found it difficult to pay off their loans on mining equipment due to the price crash. According to reports, the collateral value of their mining rigs became too low to sustain the loans acquired with them.

Amid all these crises, the latest reports reveal that the bitcoin mining hash rate has plummeted due to the ongoing price fall. The data on Coinwarz shows that the hash rate fell by more than 26% within one month.

Related Reading | Data Suggests Buying On Coinbase Behind The Bitcoin Pump

Early in June, the Bitcoin hash rate was high at 292.02 EH/s. This increase brought hope to bitcoin supporters, showing that the network is healthy and not collapsing soon. But a few days ago, on July 9, the hash rate showed 178.44 EH/s but recovered to 241.07 EH/s.

Hashrate And Mining Difficulty Levels

Hashrate facilitates mining and transaction processing on a crypto network such as Bitcoin. A high hashrate indicates the health of a network. It means that many machines provide enough computational power to keep the network working. Such increased activity convinces investors that a network is worth their investment.

From early June, Bitcoin price tried maintaining the $20K mark, but by June 18, the price fell below $18K. But it regained the $20 mark.

Besides the price being a little steady at $20K plus, Bitcoin mining difficulty had adjusted favorably for miners. For instance, the adjustment simplified new BTC block discovery by 3.7%. Miners expect it to reduce further by 0.13% after 1,600 BTC blocks. Also, there is a growing expectation that further adjustments are imminent.

Impact Of Crash On Bitcoin Miners

The revenue for miners has continued to drop due to the general market crash. The available data on blockchain.com shows more than a 79% loss of revenue within 9 months, amounting to $15M losses on July 4.

This fall in revenue is affecting many mining firms since the likes of Compass Mining plan to downsize 15% of its staff and reduce the earnings of its top executives. Many others, such as Riot Blockchain, Marathon Digital, etc., have sold their BTC holding to cushion increasing operational costs.

Related Reading | Bitcoin Drops Below $22,000, Is Peter Brandt’s Analysis Still In Play?

Many analysts believe that such a sell-off of BTC holdings will pressure the Bitcoin price in Q3 of 2022 and affect the price. But the good news for small miners in all these is that they can mine bitcoin given the fall in the price of graphics cards by 15% and fall in hash rate.

Featured image from Pexels charts from TradingView.com