Bitcoin’s Biggest Intra-Market Risk Right Now – What You Need To Know

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The monetary policy of the Federal Reserve (FED) remains the all-determining factor for both financial markets around the world and for bitcoin. With this in mind, all eyes are currently on November 02, when the next Federal Open Market Committee (FOMC) meeting is scheduled.

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However, while this is an external market risk, there is also an internal market risk that is currently evolving that should not be underestimated from a historical perspective: a bitcoin miner surrender.

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The less bitcoin falls and the longer the price stays at current levels, the greater the pressure on bitcoin miners’ margins from the price and hash rate difference.

Bitcoin’s mining difficulty is a new ATH. reaches to

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A look at the bitcoin mining difficulty adjustment that took place yesterday shows that it is up again by 3.44%. This follows the historic adjustment of October 10, when the mining difficulty increased by 13.55%.

The difficulty is updated approximately every two weeks to take into account the fluctuating hash power on the network and to ensure the minting of new bitcoins approximately every 10 minutes (block time).

So tomorrow’s adjustment is likely to put further pressure on already struggling miners who are seeing dwindling profits. Will Clemente, co-founder of Reflexivity Research, emphasis on That “IMO the biggest intra-Bitcoin market risk miner is right now”.

A compelling theory for the steady increase in hash rate is that a well-funded player is trying to squeeze inefficient miners and acquire their wealth on the cheap, “Rockefeller-style”.

As a result, a miner can surrender. During this event, non-profit miners will have to sell both their mining hardware and their holdings of bitcoin. On a larger scale, this could trigger significant selling pressure on the price of bitcoin, as seen with past miners’ capitulation.

Clemente said the likelihood of a second miner surrendering after the first period in June is increasing. The leading indicator to watch is the Hash Ribbon.

bitcoin hash ribbon
The chances of a second bitcoin miner surrender are increasing. Source: Twitter

clement concluded,

Considering who this entity is, I think it is beneficial to me as BTC price is 70% lower, energy price is higher, and hashprice is at an all-time low. Wonder if it’s a bigger player with extra energy or access to dirt-cheap energy. […] That’s why I’m very curious because it must be one with extremely low energy costs. Haven’t seen any good answers so far.

Big Name Bitcoin Miners in Trouble?

Dylan LeClaire, Senior Analyst at UTXO Management and also Co-Founder of 21st Paradigm noted That hashrate, or mining revenue per terahash, recently surpassed 2020 all-time lows. If history repeats from past bear markets, prices have just begun to fall, he said.

In addition, he revealed that he has heard “some juicy rumors flying around about some big name bitcoin miners who are in trouble here”.

According to him, the ever-increasing pressure on bitcoin miners could end in two situations. Either it is the bottom. “The volume crunch reflects the apathy of the sellers. Extended consolidation/accumulation period,” LeClair said.

However, the scenario considered by analysts is that BTC is currently hitting the $6,000 level in 2018/2019. If the hash rate continues to rise, increasing pressure will result in miners surrendering.

As of press time, the BTC price has maintained a lack of volatility and remains at around $19,300.

BTC USD
Bitcoin trading sideways. Source: trading view





Credit : www.newsbtc.com

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