Technical Analysis of BTC/USD for May 31, 2021

Crypto Industry News:

The difficulty of mining bitcoin has seen a significant decline. Along with it, the hash rate dropped to levels that had not been observed until recent reports from China in the context of mining.

The on-chain data shows that the mining difficulty on the network has been adjusted to 21.05 trillion at a block height of 685,440. That equates to a 16% drop from the recent high of May 13.

The average Bitcoin block production interval has already increased to 11.8 minutes between May 13, the date of the last correction of mining difficulties, and May 21, when the Chinese Council of State announced its desire to crack down on Bitcoin mining and trading in the country.

This interval was 18% faster than the 10 minutes per block assumed by the Bitcoin network. Additionally, the average hash rate between May 13 and May 21 has already dropped to around 147 EH / s. Following a comment from the State Council of China on Friday last week, the seven-day moving average hash rate remained relatively stable at 150 EH / s.

Some miners have started the migration process from the provinces of northern China to the Sichuan hydropower node. The power plants there are limiting supplies to energy-intensive industries, including bitcoin mining farms, due to the delay in the rainy season. As a result, there was a sharp increase in the demand for electricity by the general public, which should have been prioritized.

Technical Market Outlook:

The BTC/USD pair has broken through the short-term trend line support around the level of $36,106 and keeps going lower. The market still trades under the supply zone located between the levels of $43,1459 - $41,794, so bears are still in full control of the market and only a strong breakout above the level of $41,096 (38% Fibonacci retracement of the last wave down) would temporary change the outlook to bullish. The next target for bears is May 19th low seen at the level of $29,701. The volatility is subdued and the momentum is now negative.

Weekly Pivot Points:

WR3 - $58,682

WR2 - $52,643

WR1 - $41,961

Weekly Pivot - $35,513

WS1 - $25,163

WS2 - $18,359

WS3 - $7,655

Trading Recommendations:

Even despite the recent correction the bulls are still in control of the Bitcoin market, so the up trend continues and the next long term target for Bitcoin is seen at the level of $70,000. Any correction or local pull-back should be used to open the buy orders. This scenario is valid as long as the level of $30,000 is clearly broken on the daily time frame chart (daily candle close below $30k).

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The material has been provided by InstaForex Company - www.instaforex.com

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