Bitcoin prices crashed below the $4,000 level today on a decline in the mining hash rate. Litecoin on the other hand has been stable and still remains in a range.
Bitcoin Hashrate Drops
Bitcoin’s mining hash rate dropped considerably during the past few days as mining for BCC became more profitable. As of right now the hash is split at 60% for the ‘legacy’ bitcoin chain and 40% for the new bitcoin cash. However this is expected to change tonight, when the aggressive re-targeting of the BCC protocol will increase the mining difficulty by 300 percent.
Bitcoin cash (BCC or BCH) is a fork of the bitcoin protocol that came into existence on August 1st. It is rumored that BCC is a ‘backup bitcoin’ for some Chinese miners who fear that the 2 MB hard fork part of the Segwit2x code won’t be honored 3 months down the line.
Transactions are very slow today on the ‘old’ bitcoin network. This coupled with the hash rate drop lead to a small panic when we broke the $4,000 round figure. We briefly saw a low of $3,602 on FXOpen before things stabilized. We are currently quoted almost $300 above here at $3,890 dollars per coin.
The next ‘event’ to watch out for is the expected activation of Segwit tomorrow or on Thursday. Current estimates put the activation on 23 August around 22:00 GMT. However given the current state of the network that estimate could be way off, so make sure to check the site every so often. As we get closer to the event we could get a bit of ‘selling the news’. But because prices already crashed, it seems unlikely that we’ll see sharp losses.
The technical picture hasn’t changed much. We are still in that uptrend on the daily charts started last month. To end it the bears will have to push us below the $3,600 figure. As usual with these levels we’re looking for a prolonged move not just a brief and shallow spike below the level. On the longer-term charts BTC/USD is in rally mode as well.
Litecoin Remains in a Range
Another week for LTC/USD in a range. We’re up around $4 dollars since last Tuesday but still within the bounds of important price levels.
A new rally requires a break above $52 dollars. Resistance higher up can be found at the $53.85 all-time high on FXOpen and around $57 on other LTC trading sites. A breakout above here could intensify the gains.
On the other end, the bears need a move below the $40 round figure. A move below here could start a new downtrend in prices. While stuck on the dailies, on the long-term weekly and monthly charts Litecoin is still looking bullish.
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