Miners’ sell-off and the expiration of options contracts on Friday could put further downward pressure on Bitcoin. where’s the bottom?
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- Miners sold more BTC than they generated in May.
- Liquidation liquidation refers to the conversion of an asset or cryptocurrency for fiat or its equivalents. could drive Bitcoin prices even lower.
- Cryptocurrency cryptocurrencies are digital currencies that use cryptographic technologies to secure their operation. market an area or arena, online or offline, in which commercial dealings are conducted. faces another price test – will it hold up?
Amidst the general price slump in the cryptomarket, miners of Bitcoin the biggest and most popular cryptocurrency in the world. It is a decentralized digital currency that enables users to make trustless peer-to-peer transactions. are beginning to liquidate their reserves in order to cover their operating costs.
Some of the leading cryptocurrency companies listed on the U.S. stock exchange, such as Marathon Digital digital technologies are these electronic tools that have the ability to generate, store or even process data. y Riot Blockchain a distributed ledger system. A sequence of blocks, or units of digital information, stored consecutively in a public database. The basis for cryptocurrencies. sold more bitcoins than they generated last month. According to a report by Arcane Research miners are liquidating their stockpiles of Bitcoin to record levels in order to continue production.
“ In the first four months of 2022, public mining a process where blocks are added to a blockchain, verifying transactions. It is also the process through which new bitcoin or some altcoins are created. companies sold 30% of their Bitcoin production. The plummeting profitability of the mining industry forced these miners contributors to a blockchain taking part in the process of mining. They can be professional miners or organizations with large-scale operations, or hobbyists who set up mining rigs at home or in the office. to increase its sales rate to more than 100% of its production in May “reads the report, which was quoted by Crypto Briefing .
Miners liquidate their Bitcoin reserves
The investigation deepens that this increase in the departures of Bitcoin of the wallets of the miners, who are seen as the “miners of the world. hodlers ” par excellence, could lead to a further decline in the prices of the flagship cryptocurrency. (It should be noted that the term “ hodl a type of passive investment strategy where you hold an investment for a long period of time, regardless of any changes in the price or markets. The term first became famous due to a typo made in a Bitcoin forum, and the term is now commonly expanded to stand for “Hold On for Dear Life.” ” refers to the action of holding cryptocurrencies for the long a situation where you buy a cryptocurrency with the expectation of selling it at a higher price for profit later. term, a move that is interpreted in a bullish manner).
In short, this means that operating costs outstripped miners’ profits, forcing them to draw from their savings of Bitcoin para compensar el diferencia, lo que a grandes rasgos podría traducirse como un sentimiento bajista para el mercado. La analista de Arcane Research Jaran Mellerud, noted in this regard:
If they are forced to liquidate a sizable portion of these holdings, it could help drive the price of Bitcoin even lower.
A recent report by Coin a coin can refer to a cryptocurrency that can operate independently or to a single unit of such cryptocurrency. Metrics also highlighted the current trend of sales among miners, as reflected by Crypto Briefing . According to the cryptocurrency analysis firm, the miners have sold at least USD $500 million worth of Bitcoin so far in June, reducing its reserves by almost a third.
The miners’ wallets had accumulated bitcoins through 2022, but began to reduce their holdings amid the recent turmoil. However, according to the report, the miners still hold around $2.5 billion in Bitcoin .
The reports coincide with recent announcements by the mining company Bitfarms based in Toronto, Canada, which reported this week that it had sold 3,000 BTC of its reserves, valued at just over $60 million, to reduce its debt and increase its liquidity.
Downward pressure, miners in trouble
Meanwhile, beyond liquidations, other metrics also point to the fact that miners could be facing significant difficulties amid falling prices.
According to Crypto Briefingthe indicator dataBitcoin Hash a hash is the output result of a hashing algorithm, which creates a unique, fixed-length string to encrypt and secure a certain selection of arbitrary data. Ribbons which measures the moving averages of the network’s 30-day and 60-day hash rate, also suggests que los mineros de BTC están shutting down their machines as they start to cost more to run than they can recoup with block rewards.
With Bitcoin struggling to stay above USD $20,000 miners’ revenues are falling well below last year’s highs. According to data from Blockchain.com earnings per block, which started the year at around $50 million and fell just below $40 million in early May, plunged to $16 million last week.
Lower incomes for miners could generate a vicious cycle for the ecosystem, further jeopardizing the price of Bitcoin In the end, if miners fail to cover their expenses with the block a file containing information on transactions completed during a given time period. Blocks are the constituent parts of a blockchain. reward, this would force them to sell more of their reserves, sending downward signals to investors and potentially driving prices even lower.
Bears put Bitcoin to the test
This 2022, the cryptocurrency market has been determined by a generalized bearish trend that responds to multiple factors. Digital asset price movements have been highly correlated with U.S. markets, which have responded negatively to inflation a general increase in prices and fall in the purchasing value of money. reports and the Federal Reserve’s (Fed) aggressive policies to raise interest rates.
After hovering around the $30,000 level for much of the year, Bitcoin slipped below $18,000 last week, subtracting more than two years’ worth of gains, amid fears of insolvency at reputed crypto hedge fundThree Arrows Capital capital is most commonly defined as the large sum of money you would use to invest. and the cryptocurrency lender Celsius.
Panic of a possible broader liquidity how easily a cryptocurrency can be bought and sold without impacting the overall market price. crisis in the market appears to continue to exert downward pressure on prices; although Bitcoin has managed to recover slightly and is hovering around USD $20,400 at the time of writing.
Many are waiting for the arrival of a bullish catalyst that could unleash the Bitcoin from its current depressed price range. However, the bottom may not be here yet. As the Cointelegraph is likely that the flagship cryptocurrency faces another challenge tomorrow, with the expiration of USD $2.25 billion monthly options contracts.
Meanwhile, some analysts have pointed out that the bottom might not be far off, estimating a drop to USD $15,000 levels. Among them, Ki Young Ju, CEO of blockchain analytics platform a place to buy, sell and store cryptocurrency CryptoQuant said in a tweet that the indicators suggest that Bitcoin has already hit its lowest level, although other do not rule out the possibility of a drop to USD $10,000.
At this stage, no one can say for sure if BTC will maintain this range or if it will drop back down to price levels below USD$10k, but it would be foolish not to have a plan for that possibility.
At this stage, nobody can say with certainty whether #BTC will hold this range or if it will go to sub $10k price levels ever again, but it would be foolish not to have a plan for that possibility. “Never” doesn’t age well in #crypto. Plan accordingly. https://t.co/iCsO8yQgDB pic.twitter.com/8WoLYJQqvG
— Material Indicators (@MI_Algos) June 22, 2022
Article by Hannah Estefania Perez / DiarioBitcoin
Imagen de Unsplash
