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Bitcoin plummets below $50,000

Bitcoin down by 10% in 24 hours

The bitcoin price has tumbled in recent days soon after reaching a record high.

Since nearly getting to $65,000 on 14 April, following the Coinbase IPO, bitcoin is now down to $48,000. It represents a drop of 35% in the value of the pre-eminent crypto currency.

The news come in the wake of reports that Joe Biden will put forward a plan to raise taxes on America’s wealthiest people, including the largest-ever rise on taxes on investment gains.

Other reports have suggested the dramatic price move in recent days could be a consequence of a major power cut in China.

The price crash coincided with the largest daily drop in bitcoin’s hash rate in nearly four years, which could be attributed to power outages in the Chinese region of Xinjiang.

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“We just saw the single largest one day drop in mining hash rate since November 2017,” said cryptocurrency analyst and forecaster Willy Woo. 

“The hash rate on the network essentially halved, causing mayhem in bitcoin’s price as it crashed.”

Analysts at JP Morgan have warned that if bitcoin’s price does not come back and get above $60,000 soon, its momentum signals could collapse.

“Over the past few days bitcoin futures markets experienced a steep liquidation in a similar fashion to the middle of last February, middle of last January or the end of last November,” JPMorgan strategists led by Nikolaos Panigirtzoglou wrote in a note to clients that was first reported by Bloomberg. “Momentum signals will naturally decay from here for several months, given their still elevated level.”

Bitcoin has failed to hold its upward momentum following the Coinbase listing said according to Pankaj Balani, the chief executive of the Singapore-based Delta bitcoin and cryptocurrency. “Only a move above $60,000, which is a key resistance for any bull-trap rally, will help restore confidence that the bull trend is intact,” he added.

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