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Bitcoin’s route to the hell continues

Depreciation of the Bitcoin continue and some analysts fear that the price of the cryptocurrency is lower that mining costs.

Bitcoin burning

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Bitcoin’s route to the hell continue and the cryptocurrency wiped out another 3%, losing the battle for the key support area of 4,000 USD. The price of the world’s largest cryptocurrency dropped to 3,888 USD, which is another sign for the bearish sentiment of investors against it.

Other major cryptocurrencies also are moving down today with Bitcoin Cash being the biggest loser, wiping out another 10% of its value. And this is normal, as exactly this cryptocurrencies was in the heart of the downtrend of digital money during the last week. Other big losers during the day are EOS and Stellar, wiping out 6.70% and 4.15% respectively.

The big winner, however, is Binance Coin which is rising by 14%. The cryptocurrency was formed by the ICO of the cryptocurrency exchange Binance. it is running natively on the Ethereum blockchain and follows the ERC20 token standard.

Bitcoin short-term technical analysis

Obviously, Bitcoin is losing ground and depreciating strongly since mid-November. The downtrend is obvious and the cryptocurrency lost more than 40% within 10 days. The price stabilized around the threshold of 4,000 USD, which is the main support area for the cryptocurrency right now. However, within seven days the Bitcoin lost the battle for 4,000 USD twice, falling below the threshold and digging deeper. In absence of major news and events, the Bitcoin price possibly will decrease below 3,500 USD in short- to mid-term.

If Bitcoin loses the battle for 4,000 USD, it may suffer a swift and painful drop to zero.

Bitcoin chart

The next strong enough support area will be 3,000 USD, but if touch it after holidays, this may not be much lasting and allow the cryptocurrency to fall down.

Bitcoin mid-term technical analysis

Following the November sell-off into the low 3,000s USD, Bitcoin has now carved out a clearly defined range between 3,500 USD and 4,500 USD. A consolidation event following a strong move is more likely to result in a continuation than reversal. That means currently the bears are in control.

Some analysts consider that the cryptocurrency is in the final stages of this bear market with the expectations the price to range between an absolute low of 2,000 USD to an absolute high of 6,200 USD for a substantial period of time.

However, several months will be needed for the Bitcoin to reach the bottom and find strong ground.

Many enthusiasts believe that the Santa rally is yet to arrive with Bitcoin struggling to break above the 4,000 USD mark.

Bitcoin’s route to the hell

The downtrend might not scary the crypto-community now, but the Bitcoin is flirting with the death.

Once Bitcoin’s price falls below its cost of mining, the incentive to mine will deteriorate, thrusting Bitcoin into a death spiral. Without the mining activities supporting the ledger that maintains the records of who owns what — bitcoin is, after all, a set of encrypted numbers that cannot establish the ownership of anything — Bitcoin will become worthless.

The negative trend is supported also by the fact that cryptocurrency has no store of value and no cash flows running through it. Its price is dictated only by demand and offering. And demand depends only on future expectations and hash rate, which might seriously decline in a longer-lasting price drop.

Since the Bitcoin still do not have a large implementation in our daily life, the demand might be only based on investment futures.

The crypto-community can survive this death spiral only by allowing regulations and wider spreading of the digital money as means of payment.