Kazakhstan bites bitcoin

Bitcoin volatile over Kazakhstan unrest

Bitcoin and other digital Dutch tulips have endured a torrid week thus far, with bitcoin falling 4.0% to USD 41.400.00 in Asian trading. Kazakhstan is the world’s second-biggest bitcoin mining hub and while Russian troops are shooting protestors there to restore order, bitcoin mining and the internet have been taken offline. I am struggling with a couple of crypto concepts at this point.

If there is less bitcoin mining being done, surely the prospect of lower supply is bullish, and not bearish for bitcoin? Certainly, the limited supply is what “institutional experts” have been saying is a major reason bitcoin’s price is going to the moon, or at least USD 100,000.00? Maybe it’s something to do with distributed ledger monitoring going offline as well, but that would involve blockchain, and I haven’t heard that mentioned in the same sentence as crypto for over a year.

Secondly, how can cryptos become replacements for fiat currencies around the world when mining and ledger monitoring are located in Kazakhstan? We don’t call it the Norway or Switzerland of Central Asia do we? For that reason, having the world of crypto’s reliant on any country ending in “‘stan” or “‘ia” seems risky. Only the European’s have been that stupid in recent times, tying their gaseous energy security to Russia, and look where that’s got them.

Anyway, a weekly close this evening below USD 42,400.00 would be a negative technical signal. But I believe USD 40.500.00 and USD 39,500.00 are the real levels to watch. Before the haters come out and throw dirty tee-shirts and empty pizza boxes at me while singing Bella Ciao, I believe the sell-off has come too far, too fast. Also, note my supply comments above re bitcoin mining disruption. The relative strength index (RSI) indicator has moved into very oversold territory, suggesting bitcoin could rally from here. I see no reason why it could not recapture USD 45.000.00 in the shorter term.

Either way you look at it, this weekend Saturday and Sunday trading sessions could be emotional whether you are long or short. V for volatility, not direction.

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