Are Miners The Reason For Latest Bitcoin Plummet? Mining Cost Rises To $8,000
Today, Thursday 21st, Bitcoin has plummeted below $8,000. This is the first time the asset has dropped below this crucial position for four weeks. It is also the seventh consecutive day that Bitcoin has posted negative results. More surprising, as we reported, some analysts were calling for a more bullish week. So what went wrong? Well, miners could be the reason for the recent plummet. How? Some crypto watchers believe that miners are emptying their Bitcoin wallets. This has led to a massive sell-off that is pulling prices down.
Today's Bitcoin mining difficulty adjustment has been an unprecedented one. Bitcoin dropped the most since Dec 2018 after the last adjustment on 8th Nov 2019 (-7%) as one analyst noted. He adds that with this adjustment, mining costs dramatically climb. It means that the mining cost will on average reach $8,000. Any miners will have to incur this cost and Bitcoin needs to be trading above it, for them to make a profit.
Miners Move Defies Prediction
This has been odd and a first for the digital asset. In all previous halvings, Bitcoin has gone in rallying. This trend seems to have come to an end as crypto analyst Willy Woo noted:
“Historically we front run with a BULLISH setup, miner capitulating only after halvening when revenues are slashed. This is a unique setup. Quite bearish leading up to the event.”
This once again shows Bitcoin's notorious volatility and unpredictability. Time and time again, Bitcoin has defied expectations and predictions rendered useless. While sometimes this is good, when it rallies, it is catastrophic when it plummets.
Holders and crypto watchers are now hoping that the bloodshed will end soon and prices can begin to recover. The bulls will need to protect the $7,800 support or risk further damages that could pull Bitcoin to the $7,400 price range. More bullish miners are likely to ensure the asset does not breach this mid-term support and ensure Bitcoin rallying soon remains feasible.
History Repeating Itself
The months of November and December have become key in Bitcoin's recent history. Last year, we saw the period take Bitcoin from $6,000 to mid $3,000. The year before that, the asset rallied to hit $20,000 its all-time high. This year, the holders hope that the 2017 miracle can be repeated and the 2018 fiasco avoided.
About The Author
John KiguruJohn is an exceptional writer with a liking on technology, finance and the intersection of the two. A firm believer in the transformative potential of cryptocurrencies and the blockchain. When he is not writing, he likes to listen to Nas, Eminem and The Beatles.
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