FX.co ★ Technical Analysis of BTC/USD for October 28, 2020

Crypto Industry Outlook:

Mining data aggregators attribute the decline in Bitcoin's hash rate to the end of the rainy season in Sichuan. This time causes many miners in China to migrate to other jurisdictions.

Thomas Heller of Hashr8 reported on Twitter that around 22 EH / s of mining capacity left the Bitcoin network on October 26. Heller noted that the decline coincided with the end of the rainy season in China.

Kevin Zhang of Digital Currency Group, a bitcoin mining company, also estimated a decline of 20 EH / s. He noted that Bitcoin's seven-day average hash rate was 132.9 EH / s. On a daily basis, the ratio was 112.9 EH / s.

Blockchain.com estimates that Bitcoin's hash rate dropped from 151.1 EH / s on October 24 to 116.3 EH / s the next day. At the time of preparing this publication, the decline is even more visible - to 109.3 EH / s yesterday.

Sichuan Province is one of the world's largest mining centers. Miners gather there to take advantage of cheap hydropower during the rainy season, and then leave just as quickly.

The latest data from the Bitcoin Electricity Consumption Index (BECI) of the University of Cambridge estimate that the province represented 18.5% of the global hash rate in April 2020. This was twice the rate before the rainy season.

Technical Market Outlook:

The up trend on Bitcoin continues, so the BTC/USD pair has made a new yearly high at the level of $13,788 and since then is trading in a horizontal trend, consolidating the recent gains. The local lows are shallow, so the bulls are still in control of this market. If the level of $13,698 is clearly violated, then the next target is seen at the level of $14,000. The key short-term technical support is seen at the level of $12,625 and as long as is not broken the odds for another wave up are high. The intraday supports are seen at the levels of $13,296 and $13,116.

Weekly Pivot Points:

WR3 - $15,886

WR2 - $14,555

WR1 - $13,946

Weekly Pivot - $12,537

WS1 - $11,955

WS2 - $10,713

WS3 - $10,093

Trading Recommendations:

Bitcoin is trading at the yearly highs and bulls are in control of the market. The up trend continues and the next long term target for Bitcoin is seen at the level of $14,000, so any correction or local pull-back should be used to open the buy orders. This scenario is valid as long as the level of $10,000 is broken.