With a market cap of $106 billion, Bitcoin (BTC) controls more than 40 percent of all digital coins transaction. However, besides the obvious benefits of blockchain and cryptos, there is a sell wave in the market. Over the weekend, BTC sellers pushed prices below $6,000 and wiping more than 75 percent of Bitcoin valuation since their $20,000 ATHs.
From the News
Interestingly, traders and the general Bitcoin community is beginning to get fidgety about Bitmain and their influence on mining. Remember, BitMain is a Chinese graphic and ASIC manufacturer who have literally taken over the manufacture and distribution of coin mining gear in the world. They are a monopoly in simple terms. Now, besides dominating in the ASIC business they own two large mining pool, AntPool and BTC.Com. Even though they have repeatedly claimed that these two large Bitcoin mining pools operate independently, irrefutable evidence indicate that AntPool is indeed owned by Bitmain.
On the other hand, it is public knowledge that BitMain fully own BTC.Com. Combined, these two mining pool control a whopping 42 percent of the Bitcoin mining with BTC.Com contributing 27.2 percent and Antpool controlling 14.6 percent of all the hash rate. This is a risky affair and it could even get worse because unlike GHash which at its peak in 2014 controlled up-to 55 percent of the network, BitMain is an independent ASIC manufacturer and not a group of small miners joining hands like GHash was.
This is surely a risky affair that can spell doom to Bitcoin as a store of value and the most valuable digital asset in the world. It’s clear that there is centralization. After all, common sense dictates that any entity that controls more than 40 percent of a $110 billion asset has power. All they need is an extra 9 percent of hash rate to reverse transactions within the network. That would be end of Bitcoin and as Nick Szabo says, any coin that comes through this “uncertainty” will be dominant in the future.
Bitcoin (BTC) Technical Analysis
Safe to say, and following the old adage: The Trend is your Friend. So, making decisions based on Bitcoin technical charts, it’s clear that bears are driving prices lower and are literally in charge. After weekend’s events, we saw prices dipping below $6,000 for the very first time this year. That means, even at current prices, Bitcoin is down $13,000 from their all-time highs and if the general sentiment get worse, there could be more room for more downsides.
In my view, fundamental events can help prices recover. Notice that while prices are in a down trend, accompanying volumes are comparatively lower than those in April. The past two months weekly volumes stands at around 150k while those of April exceeds 200k meaning the slide isn’t backed by big money. However, since we are not in the business of buying with emotions, let’s wait and see what happens this week. In any case, the way this week closes-above or below the psychological $6,000-will either make or break Bitcoin.
Even if there are attempts of higher highs in the last few days following that wrecking ball on June 22, Bitcoin sellers are still in charge. Yesterday’s bull pin bar right at the main support at $6,000 are but short coverings. I do not suggest selling right now. Waiting for retests of June 22 highs at around $6,800 would be ideal. From there, zooming in to the 4HR chart and shorting on every depreciation with targets at $4,500 and $3,000 with stops at $7,000 would do the job. On the flip side though, any BTC gains pushing prices above $7,000 will cancel this sell projection.
Note: This is not intended to be used as financial advice. As always, do your own research before investing into any company or token.
To see more Technical Analysis for today (June 25th) you can read my other post: