Many bitcoin miners have been compelled to sell their holdings in the $20,000 range, according to on-chain crypto-data company Arcane Research, as the price of bitcoin is in danger of falling any further.
In November, when the price of bitcoin reached an all-time high of $68,789, mining profitability soared, luring enormous investments in more production capacity. The hash rate of Bitcoin achieved an all-time high of 231 EH/s on June 14 as a result of the mining industry’s record-high competition, which also increased mining profitability to levels last seen in 2020.
The energy-efficient Antminer S19 currently generates a cash flow per bitcoin of $13,000 at a cost of $40 per MWh, which is an 80% decrease from the November 2021 peak. The Antminer S9, our stand-in for machines from earlier generations, is currently cash-flow negative. Tuesday’s article from Arcane Research
Despite possessing a sizable war chest of energy supply to keep their mining rigs operating, public mining businesses have been obliged to sell some of their holdings to offset liabilities like finance and employee pay as well as maintain the balance of their cash flows. On-chain data shows that miners sold all of their output in May, a dramatic increase from the 25–40% sales that have been typical since February.
Even though public miners only make up about 20% of the total Bitcoin hash rate, their actions might provide insight into the mood of the market. A total of 800,000 bitcoin are held by miners, with public miners controlling more over 46,000 of those coins. If this clique made the decision to sell its holdings, it might start another market-wide sell-off, which would make the already dire situation worse.
Arcane Research anticipates that the current sell-off by miners will cause Bitcoin’s price to fall even further. Additionally, the company believes that BTC will proceed in a manner similar to 2013 and 2017, when it lost 85% and 84 % of its value, respectively. BTC is currently down 70% from its all-time high; an additional 85% decline would bring it down to the $10k area.
The bottom should happen somewhere in late Q4 2022, at a price as low as $10,350, if bitcoin follows the pattern of prior cycles. said Arcane.
Arcane Research believes that HODLers can weather this cycle despite the continued sell-off being unpleasant because their faith has already been put to a much greater test in 2013 and 2017. Additionally, it stated that “those who have held these bear storms know that pain and misery is the price they pay for upside asymmetry.”
