• Tue. May 30th, 2023

Why Bitcoin is Bearish With So Much Good News This Week


Aug 28, 2022

If you’re wondering why Bitcoin is bearish when there’s so much good news this week, look no further than the price action this week. The price of Bitcoin has been bearish in part due to the news that Chinese regulators have clamped down on mining. Meanwhile, the Merge between Ethereum and Bitcoin is scheduled for September. Whether this will affect Bitcoin’s price or not remains to be seen.

Bitcoin is in a bear market

A bear market is a period when a currency’s price falls over a prolonged period of time. At the current time, Bitcoin is down about 50% from its all-time high. The global crypto market cap is also down roughly 50%. While this may be a scary time for investors, bear markets can also be great investment opportunities.

Bear markets are good for the cryptocurrency market because they flush out scams and speculators, making room for real products and services. Many pivotal projects have been spawned by bear markets in the past. One of these projects is the Lightning Network, which allows users to send and receive Bitcoin more cheaply. The concept for the Lightning Network was developed in the bear market of 2015.

The key to profiting from bear markets is to buy on the dip. You can do this by investing in a variety of digital currencies. You can even use dollar cost averaging, which allows you to earn money even during bear markets. This may be a safer strategy for long-term investments, but it’s unlikely to make you rich overnight.

While bear markets are not fun, they can make investors more consistent. While attempting to time the market is a losing strategy, investing in a bear market can help you stay more stable and boost your overall returns. It also forces you to assess your risk tolerance. As a result, you can make adjustments to your investments and strategies accordingly.

Ethereum’s Merge is scheduled for September

The Ethereum Merge is scheduled to take place on September 15-16, and it’s expected to boost the price of ether, Ethereum’s native cryptocurrency. Currently, the cryptocurrency has a market cap of around $200 billion. This makes it the second most valuable cryptocurrency after Bitcoin, which is valued at $410 billion. Ethereum supports several other cryptocurrencies, including Bitcoin, and it plays a pivotal role in the crypto industry, as it is the primary blockchain for smart contracts.

The Ethereum Merge is a major update to the Ethereum platform. Developers have been debating possible Merge dates, and most agreed on September 15 and September 20 as the most probable dates. The upcoming upgrade, called Bellatrix, will address issues with the network, such as high gas fees and network congestion.

The Merge will transition Ethereum from the current Proof-of-Work consensus to a Proof-of-Stake consensus, which will reduce transaction fees and energy usage. Proof-of-stake will also provide better performance and scalability. But what exactly does it mean for the cryptocurrency?

Ethereum is currently the leading decentralized finance platform, with over $35 billion locked up in its network. However, the recent cryptocurrency crash wiped out nearly $1 trillion from the market, causing thousands of people to lose their savings and leading to the failure of several cryptocurrency companies. Despite all of these negative news, Ethereum is focused on its long-awaited Merge.

Bitcoin mining regulators clamping down on mining

Increasing regulatory risks are threatening the future of the virtual currency industry, with China signaling a crackdown on Bitcoin mining. The country has long restricted crypto trading, citing financial risks, and recently warned payment companies to not offer crypto-related services. Mining requires large amounts of electricity and computing power, which the Chinese government does not want to see abused. Although Bitcoin mining is not illegal, it consumes significant amounts of electricity and computing power.

Crypto mining operations have become hugely popular in China because of cheap electricity costs and cheap computer hardware. But China has also banned cryptocurrency exchanges and has prohibited mining of new crypto tokens, like litecoin and ethereum. Miners in the country have been operating clandestinely, despite these risks. The country banned domestic cryptocurrency exchanges in 2013, and is expected to impose a ban on cryptocurrency mining in 2021. The government has stated that up to 90 percent of China’s Bitcoin mining capacity will be shut down when regulators clamp down.

The crackdown will target state-owned entities and industrial clusters to eradicate cryptocurrency mining. The government will also impose punitive electricity charges for mining operations.