The combination of weak near term technicals, a dip in hash rate, questions over a secretive miner/Core dev meeting, and sustained interest in ETH/ETC has pushed Bitcoin’s exchange rate down more than $20 over the weekend.While the drama continues to run high in the Ethereum universe, Bitcoin has its own little bit of drama going on for the time being.First of all, with Segregated Witness rolling out to production in the next Core release and rumors of miner dissatisfaction over the past month, a group of seven large miners and over a dozen Core devs attended a closed-door meeting this weekend.Although details are sparse, speculation is that on-chain scalability is the topic du jour.Also adding pressure is the fact that we have seen a noticeable drop in the hash rate over the past few weeks now that the block reward has been cut in half.Below is a 2-month chart of the Bitcoin hash rate difficulty.This drop has traders on edge about a potentially self-reinforcing cycle of lower prices and a lower hash rate, and while we cannot entirely dismiss this as a possibility we think that in the context of the longer term chart it is not something to worry too much right now (although it is certainly worth keeping an eye on).

Take a look at the 9-month hash rate chart below.It looks like a minor pullback in a strong uptrend to us.As we move on to the exchange markets we don’t find much reassurance here either.On the 3-day chart below we can see that the breakdown out of the pennant consolidation is now real and the price is making a run for support.Despite a pennant being a traditionally bullish formation, this failure does not come as much surprise given the momentum and volume have been unconvincing for weeks.Speaking of momentum, Willy and RSI are testing their centerlines while MACD accelerates to the downside.Conversely, the 200-period SMA has finally turned up signaling that despite the recent breakdown Bitcoin remains in a bull market consolidation.One of the other features of note on the chart below is the volume profile setup which is still not great.There is a lot of work to be done all the way down to the $466 breakout point from back in May.However, the A/D line is fairly steady indicating that perhaps there are still buyers emerging above $600.

Having said that, the longer term trendline and OTE long zone both sit around $500 and there is a relatively strong support area around the $550 low which we saw earlier this summer.While it appears as though the market will remain weak over the short term until a new local low is carved out in the coming days, we are staying neutral with a longer term bullish bias.This means that the range trading strategy we have been mentioning for the past few weeks may be more difficult to implement in the current conditions, however, buying the dips remains a legitimate plan for those with a lower time preference.will bitcoin bounce backWe think that in a year the $500 – 600 range will look great from an investment perspective.vice magazine bitcoinDisclaimer: Please always do your own due diligence, and consult your financial advisor.bitcoin demographic

Author owns and trades bitcoins and other financial markets mentioned in this communication.We never provide actual trading recommendations.Trading remains at your own risk.Never invest unless you can afford to lose your entire investment.Please read our full terms of service and disclaimer at the BullBear Analytics Disclaimers & Policies page.Advertise Jobs at BTCManager BITCOIN PRICE: 2,717.18 HIGH: 2,744.20 LOW: 2,660.50 BTC = USD #TRENDING STORIES Next Event Money 20/20 Europe • June 26-28, 2017 European-focused event on Fin-tech, providing an overlook of the disruptive ways in which consumers and businesses manage, spend and borrow… → BTCMANAGER TWITTER: TOTAL TWEETS: 3850 total FOLLOWERS: 16160 official hashtag:#BTCManager BTCMANAGER Bitcoin’s Hash Rate Distribution Appears to be Becoming Less Centralized In 2012, only a few bitcoin mining pools or companies controlled the mining industry.ethereal tutorial pdf

Mining pools like Deepbit maintained majority control over bitcoin’s hash rate, at times nearly 40 percent of the hash rate distribution.As years passed and as new mining equipment came into existence and the bitcoin industry itself began to demonstrate a rapid pace of growth, new contenders emerged, and the mining ecosystem appears to have became much more decentralized than before.As seen in the infographic below, the contrast between 2012 and 2017 is massive.nsa made bitcoinIn fact, apart from slush, none of the mining pools that were active in 2012 are still operating to this date.bitcoin fix sees delaysHowever, the infographic shows the hashrate distribution of mining pools, not miners, which makes it virtually impossible to track the geographic location of miners and to precisely measure the degree of centralization of mining.Over the past few years, many bitcoin users and investors expressed their concerns over the centralization of bitcoin mining in China.

Some presented rather absurd claims that the Chinese government can potentially seize mining infrastructure of Chinese miners, lead a 51 percent attack and take over the Bitcoin network.These questions were brought up in conferences and at presentations of bitcoin by security experts like Andreas Antonopoulos.Since the beginning of 2016, Antonopoulos discussed extensively the centralization of mining in China and how it could be ultimately beneficial for both China and the mining industry.The primary reason behind the centralization of mining in China is the rapid adoption of technologies used in mining.As Antonopoulos explains, an ASIC chip or any mining equipment become obsolete within two to three months.Therefore, mining firms closest to the production site or manufacturers of ASIC miners will be able to generate a greater hash rate first.The centralization of mining in China indirectly implies that miners or companies within the country are leading the development and innovation of mining equipment.

China has also seen a spike in energy or electricity production.Consequently, this resource became a lot cheaper than it used to be and many individuals and businesses were looking into various ways of using surplus energy in profit-driven operations.Chandler Guo, bitcoin miner and angel investor in Bitcoin and Ethereum Classic startups, claims that even Chinese energy companies are mining bitcoin with surplus electricity by purchasing ASIC miners and mining infrastructure from mining companies.“Today, the energy companies are jumping on the bitcoin mining business.Before that, we [miners] bought electricity from them [energy companies] to mine bitcoin.Today, the seller who is selling electricity to us, they’re mining bitcoin by themselves,” said Guo.“[Energy companies] don’t sell electricity to us, they buy mining equipment from us.A lot of energy companies are becoming bitcoin miners.Even small energy companies can buy at least one to two petahashes.” Despite the enormous output of energy in China, the mining industry expanded to colder regions such as Iceland where major Bitcoin companies like BitFury are based, as the climate naturally prevented ASIC miners and other necessary hardware products from overheating.