The recent daily death cross on the Bitcoin chart is beginning to rear its ugly head after the world’s largest cryptocurrency by market cap failed to breakout above $7,000.
Trade volume has dropped off significantly over the past fortnight, averaging around $30 billion per day despite regularly topping $70 billion earlier in the month.
The apparent lack of interest will undoubtedly be a cause for concern for bullish Bitcoin investors, especially considering its failure to break above $7,000 after March 13’s sell-off.
One glimmer of hope for Bitcoin’s tribal followers is the upcoming halving event, which will see block rewards for miners slashed from 12.5BTC per block to 6.25BTC per block.
This has historically been a bullish event for cryptocurrencies as supply on the market begins to dry up, however the dropping hash rate remains a cause for concern.
When mining difficulty and hash rate drops at the same time it indicates that miners are exiting the market ahead of the halving, which means that the network becomes more vulnerable to 51% attacks.
As Bitcoin continues to look strained from a fundamental standpoint, the technicals on the chart creates a similarly bleak picture.
If the death cross continues to mount pressure on Bitcoin it could well be in store for a 50% correction, which will take it to 2018’s low of $3,150.
A fall from grace of this magnitude will see the theory of miner capitulation come into play. The theory predicts that as Bitcoin’s price falls so does mining profits, which could cause mining pools to shut down as they cut losses.
However, for now BTC continues to trade above $6,000 and until the $5,900 level is breached to the downside it looks like it will continue to consolidate over the next week.
For more news, guides and cryptocurrency analysis, click here.