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Bitcoin price drops to $ 52,000, settling nearly $ 10 billion

Fears of regulatory moves come on the back of a brief hash rate drop due to a blackout in China.

Bitcoin (BTC) suddenly fell to lows of $ 52,000 on April 18 in a timely reminder of how price action often follows the hash rate.

Rumors about China and the United States lead the sale of BTC

Cointelegraph Markets Pro and TradingView showed a brutal hour for Bitcoin bulls everywhere in the early hours of Sunday, when the market went from $ 59,000 to $ 52,000 in a matter of minutes.

Bitcoin Drops Below $ 60,000 – Why is the price of BTC dropping?
Having lost the $ 60,000 support at the beginning of the weekend, the BTC / USD pair was still fairly stable before the sharp price movement, which liquidated positions worth nearly $ 10 billion in the last 24 hours.

Around $ 7,000, the hourly loss defies the record setback seen in February after Bitcoin hit $ 58,000 for the first time.

Following the crash, analysts pointed to two events as possible causes: a drop in the hash rate and rumors from unidentified sources that US regulators were about to accuse unidentified «financial institutions» of related money laundering. with cryptocurrencies.

The hash rate, an estimate of the computing power dedicated to the network by miners, plummeted by nearly half by some estimates. This was due to a massive power outage in China’s Xinjiang province, where large numbers of miners are located, which began two days ago.

Messi would have earned seven times his salary if he had accepted BTC as a form of payment
In a classic representation of the old adage, «price follows hash rate,» the BTC / USD pair then caught up with reality.

«Price and hash rate have always been correlated,» argued statistician Willy Woo, pointing to a similar event from November 2017.

Woo added that, as then, the impact on price action was temporary and that the hash rate had already recovered «almost completely» in the meantime.

Coin Metrics co-founder Nic Carter was equally unfazed when the Xinjiang troubles began, but predicted that media interest in the event would be strong.

«If the blackout lasts 3 weeks, Bitcoin will have a historically large difficulty adjustment, but I think that is unlikely: either the network is back online or the miners will move their hardware,» he said as part of a discussion on the networks. social on Saturday.

Investor on-chain activity points to Bitcoin price hitting a ceiling above $ 166,000
Bitcoin’s difficulty decreases when miners leave the network, but according to the latest estimates, its next adjustment will only mean a modest 1.8% decline.

There is no panic among the miners

Meanwhile, another topic allegedly stirring sentiment appeared to be a single tweet about US legal action.


– FXHedge (@Fxhedgers) April 18, 2021

The US Treasury will accuse several financial entities of money laundering using cryptocurrencies
The «FXHedge» Twitter account, which appeared just as prices fell, cited anonymous «sources» warning of regulators taking unidentified «financial institutions» to court for money laundering. related to cryptocurrencies.

No further details were given, but the tweet quickly garnered more than 5,000 «likes» and nearly the same number of «retweets,» dropping to $ 52,000.

It’s crazy to sell Bitcoin (BTC) now, claims one analyst pointing to two bullish indicators
As the media took over the action, the more seasoned bitcoiners were as calm as ever about what was simply business as usual in a bull run.

«Honestly, after you’ve been in the game long enough, you become numb to Bitcoin price drops,» podcast host Steven Livera tweeted.

«Bitcoin is just doing its thing on the way to $ 10 million or more.»
At press time, the BTC / USD pair had recovered about half of its losses to trade above $ 56,000.

Rafael Schultze-Kraft, co-founder and CTO of on-chain monitoring resource Glassnode, cited a classic on-chain metric as proof that now was a perfect time to buy Bitcoin.

‘Bitcoin should hit $ 100,000 between April and September this year,’ says PlanB
The Transaction Spent Production Ratio (SOPR), which measures global profit and loss, had «reset» for the first time since a March record high of $ 61,700.

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