Riding The Wave News Summary #11
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News
Table of Contents
The ‘Black Friday’ Crypto Crash That Wiped Out $136B Was Caused By…
Bitcoin records all-time high network difficulty amid price fluctuations
El Salvador buys its cheapest 410 Bitcoin as prices reach $36K
BTC price falls to $34K as Bitcoin RSI reaches most ‘oversold’ since March 2020 crash
Notable Mentions: Ethereum Founder Vitalik Buterin Details How He Dumped $6.7 Billion in SHIB
The ‘Black Friday’ Crypto Crash That Wiped Out $136B Was Caused By…
Today one of the biggest economies in the world proposed banning the use and mining of cryptocurrencies on Russian territory.
According to them, cryptocurrency acted as a threat to financial stability, and reasons pertaining to citizens’ wellbeing and its monetary policy sovereignty drove the ban.
This was one of the biggest blows to the global crypto market after China’s ban since Russia is the world’s third-largest Bitcoin miner which also raised environmental concern.
USA’s stock market has had a significant impact on the crypto market in the past and for the same reason, it won’t be surprising if that would be the case today as well. The S&P 500 Index over the course of 72 hours has lost almost 4%.
Plus since Bitcoin and the SPX share a correlation as high as 0.59, the dips were bound to affect one another and so possibly it did.
I’m sure the negativity around crypto coming from Russia had some impact but I think it’s much more likely that the USA stock market drop had a much more significant effect. As the article notes Bitcoin & the SPX are currently highly correlated. This means if one makes a move there are decent odds that the other may make a similar move as well. Due to this a lot of investors are looking out to see how the government will respond to the stock market drop.
Bitcoin billionaire Mike Novogratz says plunging crypto will have a hard time rallying until stocks find a base
Billionaire investor Mike Novogratz has said cryptocurrencies will struggle to pull out of their sell-off if stocks keep falling, as he urged investors not to buy the dip.
Prices for bitcoin, ether and other digital currencies have fallen sharply across the board as they track Wall Street's rout in tech stocks, driven by pressure from rising bond yields.
"Crypto will have a hard time rallying until stocks find a base," Novogratz, CEO of investment company Galaxy Digital, tweeted late Thursday.
Novogratz warned Tuesday that as long as rates go higher, there will be pressure on crypto assets and the Nasdaq. The tech-heavy stock index has dropped more than 9% in the last month.
Novogratz suggested in his Thursday tweets that there might be a glimmer of hope for markets. "That said, crypto already had a decent sell-off and is running into some buying support," he said.
Crypto could rally without stocks finding a base but with the current market sentiment/momentum direction, it’s less likely we do. If the government panics and takes the easy way out for the stock market of continuing to inflate the USD and keeping interest rates as they were during the height of Covid we could see relief in the short term for stocks and therefore crypto. If they don’t and continue to take a hard stance of aiming to decrease inflation it’s more likely we will continue to see stocks take a hit and therefore crypto may follow.
Bitcoin records all-time high network difficulty amid price fluctuations
The Bitcoin (BTC) network has recorded a new all-time high mining difficulty of 26.643 trillion with an average hash rate of 190.71 exahash per second (EH/s) — signaling strong community support despite an ongoing bear market.
The Bitcoin network difficulty is determined by the overall computational power, which co-relates to the difficulty in confirming transactions and mining BTC. As evidenced by the blockchain.com data, the network difficulty saw a downfall between May and July 2021 due to various reasons including a blanket ban on crypto mining from China.
However, as the displaced miners resumed operations from other countries, the network difficulty saw a drastic recovery since August 2021. As a result, on Saturday, the BTC network recorded an all-time high of 26.643 trillion.
Many of the large and small miners relocated as they could afford to without financial difficulties following China’s ban. Small Miners didn’t have trouble relocating as they didn’t have much equipment to move whereas large miners could afford to move due to cash reserves they had saved up for issues such as the mining ban. Now that they are set up we should hopefully see more stability in the network & more consistent network mining difficulty. This increased mining when combined with Miners holding instead of selling shows they have hopes of a jump in price in the near future (possibly between now and sometime in the next couple of months).
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