Bitcoin Price Analysis: Bitmain Downsizing, BTC Dec Gains May Prop Bulls
Latest Bitcoin News
When Bitcoin was changing hands at around $8,000 apiece, Bitmain announced what it said would be the biggest data center in the US. After launch, the $500 million mining facility would employ 400 people from Rockdale. However, with falling BTC prices and the giant chip set manufacturer preparing for an IPO amid rumors of disastrous Q4 2018 reports, Bitmain is cutting back and construction at Rockdale has been put on hold.
It is for this sole reason that Milam County Judge Steve Young is “very disappointed” because they had advertised this mega project for their constituents. According to a statement from Steve, Bitmain laid off all employees at the facility save two engineers and a PR specialist. Nevertheless, Steve continues, the company plans to forge ahead with a smaller facility despite free-falling digital asset prices and waning demand for mining gear.
Bitmain’s predicaments were even compounded after several US customers filled complaints at federal courts saying the company was hijacking processing speeds for their own use. Controversy didn’t end there. A few days back, Jihan Wu was relieved of his position as the CEO of the company following a board of directors meeting. As reported by Ethereum world News, stakeholders were satisfied with the progress of their planned IPO as well as the Bitmain’s handling of the BCH ABC, SV damaging hash war.
BTC/USD Price Analysis
Overly, BTC is down 12.3 percent in the last week and after 10 percent drops on Jan 10, it looks likely that bears will further drive prices to new levels. As visible from the chart, the path of least resistance is southwards. After 13 days of horizontal consolidation, last week’s break below psychological $4,000, did reinvigorate sellers. Assuming bears keep up with yesterday’s momentum, the meltdown may extend BTC losses to Dec 2018 lows at $3,220 and later $3,000. On the flip side, ideal target by the end of the week is $4,500 but that depends on what price action has in store this week.
Trend and Candlestick Formation: Bears, Bear Breakdown
From a top down approach, there is hope for traders. In the weekly chart for example, price revival by week ending Dec 23 led to a double bar bull reversal pattern at the back of average volumes. The simple fact that sellers are yet to clear Dec 2018 lows mean bulls have a chance. However, in the short term, bears are in control. In the daily chart, yesterday’s bear bar did close below the minor support level and Dec 28 lows at $3,700 not only triggering stops but igniting shorts with first targets at $3,500. Now that there is a bear breakout pattern, potential support will be at around $3,450 or the 78.6 percent Fibonacci retracement level. Should BTC sellers take charge, then odds are bears will retest $3,220 by end week opening up $1,500 possibilities by the end of January.
Volumes: Flat, Bearish
A simple trend line point to bears. volumes are low and incomparable with Nov 20 bear bar—117k versus 37k. Although volumes have been tapering, Jan 10 bear bar—35k versus 18k did complement Nov 20 losses. Therefore for bulls to be in control, we need to see participation spikes and most importantly price expansion recouping losses of Jan 10-13 supported by volumes exceeding today’s averages—17k.