Yesterday’s heightened risk aversion across capital markets could not help but impact the value of cryptocurrencies. In this case, digital currencies drew no support from their usual status as defensive assets and headed north alongside all other assets.
The BTC price slipped to $29,724 on Tuesday. As expected, the cryptocurrency dropped out of the sideways range of $31,000-33,000, and continued to slide after breaching the $30,000 mark.
At this point, the next support level is at $29,650, then $29,500. That said, the market may well move even lower.
The challenge of mining BTC has dropped to the lowest levels since January 2020. This is likely due to the migration of miners from China to other regions. About 90% of mining capacity in China has been shut down due to the ban on cryptocurrency mining in the country. What does it mean? This means that almost all mining facilities have been switched off. However, they still operate outside of China, where mining continues.
Reducing the complexity of mining the flagship cryptocurrency makes this production about 50% more profitable.
China's crackdown on cryptocurrency mining is extremely negative for BTC and other altcoins. It will remain in effect in the near future, so the downward trend looks set to continue.