Bitcoin’s drop in hashprice could become reversal point for market, and here’s why
Previously, U.Today covered that Bitcoin mining profitability is at an all-time low after digital gold lost ground around $20,000 and fell well below the all-time high of 2017 and now struggles to get back above the psychological level. Support.
Besides the low Bitcoin price, the chief difficulty of the network and rising electricity costs all over the world are enormously pressuring Bitcoin and crypto miners. The hashprice is currently at its October 2020 lows.
Many metrics suggest that miners turn off large-scale mining rigs to minimize their losses due to low or almost non-existent margin. In addition to the shutdown of mining rigs, address activity by miners suggests they are selling off their holdings in droves to cover some of the loss caused by the unexpected negative market performance.
Unfortunately, the majority of GPUs and mining devices are no longer profitable, which may lead to the exponential drop in the hashrate in the upcoming weeks as more big farms decide to go offline to avoid massive losses.
The average breakeven price for a mining rig currently sits at around $21,000, which had already been broken by BTC as it struggles to gain a foothold even above $20,000.
For miners to be able to comfortably mine BTC and gain some decent profit from it, the orange coin should reach at least $30,000. The brighest part of the story is that with the rapidly decreasing hashrate, we will see a respectable drop in the difficulty of the network.
In hindsight, the massive selling pressure coming from the miners could become a point of capitulation for the market bleeding over the past month.
