Bitcoin is currently trading at around $6,750, down 0.27% in the past 24 hours. Meanwhile, altcoins like XRP (8.42%), Dash (5.42%), and VeChain (6.18%) among others are enjoying the greens.
While Bitcoin has wiped out all the gains made in 2020 and is now down over 9%, cryptos like Tezos (29%), Dash (65%), BSV (79%), HBAR (145%), and Kyber Network (166%) among others are up significantly on a year-to-date basis.
The price of bitcoin has surged 70% from the low it put on March 12 but, still, not everything is good for the flagship cryptocurrency. Joe 007, a Bitcoin whale on cryptocurrency exchange Bitfinex says capitulation just doesn’t get completed within a day and neither does price make a V bottom recovery.
“V-bottom recovery to the tune of 3K point up within a week of “capitulation” would be some unprecedented new price pattern for Bitcoin. “But this time it’s different!” – oh, yes, of course. How silly of me to forget….” quipped the whale.
As we reported earlier, Joe007 has previously pointed out that with the halving coming in less than 50 days, overleveraged miners are “unbelievably f—cked.”
This is because of the cost of mining bitcoin which has risen to $7,300 and is 9% higher than the current BTC price.
With the recent 50% price crash, these overleveraged miners have become unprofitable which means tens of millions worth of Bitcoin would be liquidated.
And it has already started happening as Charlie Morris of ByteTree.com noted on March 25th, “Miners today sold 2,788 aginst 1,588 mined. Slamming the market, yet the market takes it.”
As we saw this week, Bitcoin miners have also been shutting down their machines as reflected in the 45% decline in the hash rate of the network this month.
Recently, Bitcoin mining company Hut 8, which contributes 1 EH/s less than 1% of the network, “responded to the BTC price drop by reducing hash 35%, which in turn reduced costs 50% (their words),” pointed out analyst Ceteris Paribus.
However, the hash rate has since then bounced and is 10x from the lowest point recorded a couple of days back. This positive development means there is no capitulation on miners’ side or lack of confidence in Bitcoin.
Also, the difficulty adjustment saw its second-biggest decline of 16%, making it easier to find new blocks, as such more miners jumped in.
Bitcoin miners are inherently long BTC prices but the low price combined with upcoming reward halving that would cut down rewards in half and a new generation of ASIC hardware being announced recently, miners are feeling the pressure.
As such, Joe007 believes the “delayed supply” of Bitcoin by miners is just getting started because these miners accumulated BTC in anticipation of “mad gainz” from the halving in May 2020.
“Overleveraged miners still overleveraged and doubly fucked by coming halving. And L/S margin ratio still doesn’t look too good TBH. I may have closed my shorts but it in no way means I’m ready to go all long, especially with leverage,” said the Bitfinex whale the day after the massive sell-off.
He is actually “waiting for the delayed supply reentry shock to unfold,” instead of the supply reduction shock which is expected by everyone.