Bitcoin price clings to $32K as on-chain metrics hint at further downside

Cryptocurrency investors awoke to another round of price declines on June 22 after the price of Bitcoin (BTC) dropped to a 6-month low at $28,805. The dip below the crucial $30,000 level might appear to be a prime buying opportunity but data shows that institutional investors are continuing their longest selling streak since February 2018.Data from Cointelegraph Markets Pro and TradingView shows the June 21 dip below $32,000 and recovery above $33,000 was just a precursor to Tuesday’s move which saw BTC hammered at the start of the trading day, reaching a low of $28,805 before bouncing back to $32,000 at the time of writing.BTC/USDT 1-day chart. Source: TradingViewEther (ETH)  also took a hit, dropping by 15% to a low of $1,700 after bulls failed to hold the $1,900 level. Unless a significant source of momentum emerges to help the market stage a turnaround, the current trend continues to be negative as evidenced by bears dominating Bitcoin’s $2.5 billion options expiry on June 25.Warning signs provided by the dataWhile the price action on June 21 may have come as a surprise to many, numerous indicators hinted at the decreasing momentum and possibility of the price dropping further.According to data from Glassnode, the number of active addresses on both Bitcoin and Ethereum have declined significantly from their highs in May, with active BTC addresses falling by 24% while active Ethereum addresses fell by 30%. Number of active addresses on Bitcoin vs. Ethereum. Source: GlassnodeThe drop in activity on the networks has led to an even more dramatic decline in the USD value settled on-chain, with the amount settled falling by 63% to $18.3 billion per day on Bitcoin and by 68% to $5 billion per day on Ethereum. Bitcoin vs. Ethereum total transfer volume (USD). Source: GlassnodeDeclines in activity and value transacted on the networks can be interpreted as a drop in enthusiasm in general as investors who bought at the highs in April and May must now decide if they want to sell at a loss to avoid further the potential for further downside or hold with the hope that the market will eventually turn around. China crackdown leads to panicAnother major source of the market downturn which has been building for weeks is China’s crackdown on cryptocurrency mining operations in the country. This has led to a substantial drop in the record hashrate to levels last seen in September 2020. Bitcoin mean hash rate. Source: GlassnodeWhile the closing of a large number of Chinese mining farms and the resulting decline in hashrate is a negative development in the short term, Delphi Digital has taken the stance that “in the mid to long term, this should be viewed as healthy for the Bitcoin network as hash rate concentration risk is significantly reduced.”According to Delphi Digital, the hash rate concentration in Chinese-based mining pools has been declining since China began its crackdown on mining, allowing smaller pools to grow “their share from 30.81% to 37.96% over the last 30 days.”Bitcoin hashrate mix. Source: Delphi DigitalIn addition to the clampdown on mining, China has also reiterated that banks should not be supporting crypto-focused over-the-counter businesses, which led to “panic among Chinese miners and investors,” leading to a significant decline in the supply of BTC held in miner addresses.Bitcoin miner’s net position change over time. Source: Delphi DigitalWith China unlikely to change its current course of action regarding cryptocurrencies anytime soon, investor uncertainty and choppy price action are likely to continue in the short term. The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Continue Reading

Denied electricity, world's 5th-largest mining pool leaves China for Kazakhstan

BTC.com — a major crypto mining pool that is operated by BIT Mining and owned by the NYSE-listed Chinese lottery service provider 500.com — has announced the successful relocation of its first batch of mining machines to Kazakhstan. BTC.com was founded by Jihan Wu and was operated by Bitmain and Bitdeer until its acquisition by 500.com this February. As of the time of writing, the pool is the world’s fifth-largest, validating 10.4% of blocks on the Bitcoin (BTC) blockchain. The relocation comes after the company was notified by the state grid in western Sichuan province that the power supply serving one of its local data centers would be suspended imminently. In its announcement yesterday, BIT Mining stated:“On June 19, 2021, the Company’s indirectly held subsidiary, Ganzi Changhe Hydropower Consumption Service Co. Ltd […] received notice […] from State Grid Sichuan Ganzi Electric Power Co., Ltd. […] informing Ganzi Changhe Data Center, that its power supply would be suspended, effective 9:00pm Beijing time, June 19, 2021. Ganzi Changhe Data Center has since suspended its operations. Data centers in Sichuan, including the Ganzi Changhe Data Center, contributed approximately 3% of the Company’s total revenues in the month of May 2021.”The intervention from the state grid comes amid an ongoing crackdown on crypto mining by the Chinese state due to concerns over the mining industry’s carbon footprint, which runs counter to China’s decarbonization targets.In areas such as Inner Mongolia, once popular with crypto miners, regional authorities have even established a dedicated hotline for the local public to directly report any suspected illicit mining activities. Amid these pressures, at least three mining firms — BTC.TOP, Huobi and HashCow — have recently been driven to cease their activities on the mainland. BIT Mining CEO Xianfeng Yang has gestured towards this backdrop, claiming that the company is “committed to protecting the environment and lowering our carbon footprint. We have been strategically expanding our operations overseas as part of our growth strategy. Following our investments in cryptocurrency mining data centers in Texas and Kazakhstan, we are accelerating our overseas development for alternative high-quality mining resources.”Related: Bitcoin mining in China set for ‘stricter supervision’ due to carbon concernsWhile China has been an early mover against crypto miners, authorities elsewhere are increasingly signaling their concerns about power-guzzling mining sites; for the most part less on climate grounds than for their impact on local energy provision. In late April, a former government official argued that crypto mining was a major driver of the energy crisis in Kyrgyzstan.  Similar concerns have been voiced in the Caucasus and Iran. In line with China, global regulators and nonprofits, Elon Musk this year made a notorious intervention when he announced the company would no longer be accepting BTC as payment for vehicles due to concerns about the high energy consumption of Bitcoin mining. 

Continue Reading
Posted On :

China’s crackdown means Bitcoin is working, says crypto miner

China’s crackdown on Bitcoin (BTC) mining and cryptocurrency trading recently became a primary driver for the red candlesticks on crypto market charts. But one Bitcoin mining engineer believes China’s ban on crypto is “fantastic news.”Brandon Arvanaghi, a former security engineer at crypto exchange Gemini, compared China’s harsh stance against Bitcoin with the country’s ban on Facebook and Google. Arvanaghi called getting banned in China a rite of passage for free technology and stressed that the crackdown means that Bitcoin is working, not that it’s failing. “It’s making nations shiver in their boots,” he added.He said that nations are now picking sides, with China is responding to Bitcoin much like the country did to major Western tech firms, which is incredibly bullish for Bitcoin for the long and medium-term. Miners are currently flowing out of China — where a phone call is enough to shut down an entire mining plant — and into the United States.“Bitcoin is the greatest store of value in the history of planet Earth; nothing is even comparable,” Arvanaghi said, adding:“We are going to start valuing our wealth in terms of Bitcoin, and the volatility is the tax that we pay for being on the right side of this trade.”Related: Banks fall in line as China’s central bank cracks down on crypto accountsArvanaghi also compared Bitcoin’s journey to a video game. In this trope, market-crashing news like drops in the hash rate or geopolitical tensions are bosses along the way “to the inevitable state of Bitcoin becoming universally identified as the greatest store of value we have ever seen.” In the meantime, miners are going to looking for cheap electricity around the world and Texas will be a potential address, Arvanaghi predicted recently. “We have governors like Greg Abbott in Texas who are promoting mining. It is going to become a real industry in the United States, which is going to be incredible,” he added.

Continue Reading
Posted On :