As Bitcoin slumps to new lows today, that sad trombone is really getting a workout.
Flailing around the $3,400 mark, Bitcoin’s performance over the past two months has been anything but impressive.
Now new reports are showing that the Bitcoin price crashes correlate with minors throwing in the towel.
Mining Bitcoin, after all, takes resources – analysts are looking at exchanges and other sources of information to monitor the hash rate of the Bitcoin network and other metrics that show how Bitcoin mining fairs in a time when the value of the coin is depressed.
The BitMex exchange cites a 31% drop in the total hash rate, and 21.8% fewer blocks mined in the past week. Today’s report also shows that over 1 million Bitmain S9 miners are no longer active.
Coverage at Cryptopotato also goes into in the lowering of profit margins, which before the crash were estimated at something like 50%. Now, writes Benjamin Vitaris, that margin is about 30% for Bitcoin and 15% for Ethereum.
As in most reports of this kind, Vitaris’s piece also cites the infamous Bitcoin Cash wars as triggering unease and volatility and ultimately depressing the market.
It’s a story of struggle between two parties, and a struggle to keep mining profitable as both parties lost out over the few weeks that in the newest hard fork has had ABC and SV battling it out on exchanges.
In some ways, there’s really no bright news on the horizon. We kept looking for Bitcoin to rally after big drops, but it just keeps circling the drain. Then you have prominent government voices making arguments against crypto as a whole – and more red ink when it comes to mining practices.
Many holders, though, are still bullish in the long term. If you bought in at the top, you may be waiting forever to get your money back, but for those who believe in the power of crypto to transform fintech over the next 20 or 30 or 40 years, a diversified and well-established entry position might still make sense. Analysts are still looking for that “trend funnel” that will show some sort of reversal – and in the wake of that very calm and stable period before Thanksgiving, some experts feel like Bitcoin can regain some higher position and stay there.
“As of now, Bitcoin is consolidating over a tight range between $3370 and $3430 – just underneath the 100 days moving average line (marked in white on the 1-hour chart),” writes Yuval Gov today. “This line was supporting Bitcoin yesterday, but now Bitcoin is testing it this time as a resistance.”
With that in mind, the U.S. Congress is poised to consider two cryptocurrency-related bills on Thursday, and that might move markets more than anyone expected. Watch this space.