Bitcoin Miners ‘Next Trigger’ for BTC Price Crash as Outflows Hit Multi-Month Highs
Bitcoin (BTC) miners could form the next BTC price trigger, research warns as withdrawals intensify.
In a Quicktake post for analytics platform CryptoQuant on Nov. 10, contributor MAC.D suggested that miners may soon face “bankruptcy.”
Research: Network conditions ‘will suffocate’ miners
The result is that mining rigs idle and miners sell BTC to cover expenses.
“BTC security is at an all-time high, but the mining volume is gradually decreasing. This will suffocate the miners,” explained MAC.D.
He pointed to outflows from miner wallets passing 5,400 BTC for November 9 alone, which “could be interpreted as increased selling pressure.”
Going forward, the situation could worsen if major mining companies end up selling stored BTC en masse as a way to pay liabilities.
“There is already a lot of news about mining companies listed on NASDAQ not being able to pay their debts. If they go bankrupt, it will be a situation where they will have no choice but to sell BTC,” the post continued:
“Therefore, it is necessary to keep a close eye on the miner withdrawal table, and if the amount of miner withdrawal increases, BTC is likely to fall further.”
A silver lining could still come shortly after such a large capitulation. Historically, there has been a correlation between wiped out miners and BTC prices.
“However, the bankruptcy of former miners has formed the bottom of BTC,” the post concluded:
“So when they go bankrupt, they have to use that as an opportunity to buy BTC.”
The mining costs outweigh the gains
Continuing the theme, journalist Colin Wu, meanwhile, noted that even the most popular Bitcoin miners were now unprofitable.
Related: FTX and Binance’s Ongoing Saga: Everything That Has Happened So Far
“As BTC has fallen by 20% in the last 7d, F2POOL shows that bitcoin miners such as Whatsminer M30S and Antminer S17Pro have fallen below the shutdown price,” he tweeted on the day, links to large mining pools f2pool:
“Top bitcoin miners like the Ant S19 XP also account for 56% of electricity bills.”
Charles Edwards, CEO of asset manager Capriole, also flagged the unsustainable production costs versus miners’ income at current prices.
“A lot of Bitcoin miners are now shutting down their rigs,” he commented on a diagram.
“Bitcoin’s electricity costs have just been breached for the second time in just 5 years. The electricity bill for the average miner is now greater than the income earned.”
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