Bitcoin’s Drop in Hashprice Could Be a Reversal Point for the Market, and Here’s Why
Earlier, U.Today covered that bitcoin mining profitability is at an all-time low, as digital gold has lost ground around $20,000 and has fallen significantly below 2017’s all-time highs and now from psychologists Struggling to come back up. help,
Apart from the low price of bitcoin, the main difficulty of the network and the rising cost of electricity around the world are putting enormous pressure on bitcoin and crypto miners. Hashprice is currently at its October 2020 low.
Bitcoin’s low price, high hash/difficulty and high energy costs put severe pressure on miners’ margins. Hashprice is now the lowest level since October 2020.
The hash ribbon is crossed (bot left), indicating that the machine is unplugged + miners are sending BTC to exchanges. (bot. right) pic.twitter.com/x7J7pYTZ9W
— Will Clemente (@WClementeIII) 18 June 2022
Several indicators suggest that miners are largely shutting down mining equipment to cover their losses due to low or almost non-existent margins. In addition to the shutdown of mining rigs, the miners’ address activity suggests that they are selling their stakes largely to cover a portion of the losses caused by unexpectedly negative market performance.
Unfortunately, most GPUs and mining equipment are no longer profitable, which could lead to a sharp drop in hashrate in the coming weeks as more large farms decide to go offline to avoid major losses.
The average breakeven price of mining rigs is currently around $21,000, which BTC broke as it struggles to gain a foothold above $20,000.
For miners to be able to comfortably mine BTC and make some decent profit from it, the orange coin must reach at least $30,000. The biggest part of the story is that with the rapidly declining hash rate, we will see a respectable drop in network difficulty.
Finally, the heavy selling pressure coming from miners could turn out to be a capitulation point for the market hemorrhage in the past month.