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Bitcoin: fears did not materialize

Over the weekend, the main cryptocurrency did not go beyond the narrow consolidation range of 31,082.82 - 34,708.27. Moreover, the price once again confirmed the strength of the support level at 31,082.82 with a false breakdown of the shadow.

Today, the price finally broke through the strong mirror resistance level at 34,708.27, which for the past week did not let BTC/USD go up. The opening of the daily candle occurred almost at this level, which is a good technical sign. Of course, it is impossible to draw conclusions from an open candle, but if the day closes with a bullish bar above the specified horizontal, BTC/USD will open the way to the next target - at 38,610.88 (upper red dotted line).

What does this technical picture say? First, Bitcoin consolidation in the sideways continues. Secondly, major players do not allow the price below $30,000 per coin. Thirdly, so far we have not received any new information and signals for the medium to long-term period, but the growth margin remains in the consolidation corridor.

It is worth noting that twice the fall below the support at 34,708.27 (a false breakdown with long shadows) occurred amid panic due to another tightening of measures against cryptocurrencies in China. But, apparently, this threat does not frighten big players much, since they defended the level both times.

Meanwhile, fears that Chinese miners will now sell off Bitcoins and push the price down have not been justified. They were dispelled by a new report, The Week On-chain, from the analytical resource Glassnode.

Yes, large miners will probably need fiat money to liquidate and cover costs. But the data showed that they are "unlikely" to put pressure on the price of Bitcoin by selling coins in the coming weeks.

Glassnode notes that at the end of this week, the complexity of Bitcoins will fall by almost 25%. This is the largest decline in history, which means that its production will be more profitable for the remaining miners.

Thus, they should have less incentive to sell, since the network participants will be in an upward spiral of profitability until the missing hash rate returns and the complexity increases.

"The task of mining Bitcoins is 23.6% more difficult, despite the fact that revenue grew by 154% on average in 7 days," the report explains.

"Since a very large portion of the hash power is currently off and in transit, the next difficulty adjustment is estimated at -25%. Thus, miners that remain operational are likely to become even more profitable in the coming weeks unless the price changes further or the migrating hash power returns to the network."

Also, another researcher, Hass McCook, stressed that the possibility of obtaining 75% of profit is open to miners. He came to this conclusion using data according to which the energy consumption of Bitcoin is about 2,520 gigawatt-hours for a two-week period of complexity. If the extraction of 1 BTC costs no more than $20,000, the difference between these costs and the spot price, which at the time of his conclusions was $34,500, is obvious.

Against this background, the chances of Bitcoin growth in the wide sideways range of 28,392.99 - 41,980.24 remain. Technically, there is a power reserve to its upper limit. The nearest target remains the level of 38,610.88 (the upper red dotted line). As you can see, the forecasts are being worked out quite well.


The material has been provided by InstaForex Company -