Bitcoin's price remained in a tight range on Saturday amid declining hash rate and forming bearish divergence, increasing the risk of a bearish breakout.
Current Situation Analysis
Bitcoin was trading at $94,296 according to the latest check, on the response to the Bureau of Labor Statistics report showing that the U.S. economy created over 256,000 jobs. The unemployment rate fell to 4.1%. Consequently, American equities also fell, with Dow Jones and Nasdaq 100 indices declining by 697 and 317 points respectively. Meanwhile, the bond market continued its sell-off, with the 30-year yield rising to 5.0%
Hash Rate Decline
Data by IntoTheBlock shows that Bitcoin’s hash rate has dipped in the past few days, reaching 750 TH/s on Saturday, January 11. This is lower than the 30-day high of 911.88 TH/s and the 30-day average of 793 TH/s. The hash rate is crucial as it measures the speed at which mathematical puzzles in the Bitcoin network are being solved.
Bearish Divergence
The daily chart shows that Bitcoin is at risk of a bearish breakout, forming a head and shoulders chart pattern with a neckline at $90,952. The RSI and MACD indicators are showing bearish divergence, raising concerns for a further downward trend. If the neckline breaks, the next support will be at $78,285.
The declining hash rate and bearish signs on charts call for caution in the Bitcoin market. However, long-term trends remain under scrutiny for potential reversals at higher levels.
