Bitcoin and other cryptocurrencies are feeling the effects of the negative trends happening in the market. The crypto winter predicted to end in early November by some experts is still in full swing. Crypto critics like Warren Buffet still view crypto as a risky asset.
The FTX saga further changed the narrative, with investors unsure of keeping their holdings with exchanges. In addition, the Securities and Exchange Commission (SEC) now has support in the lawsuit against XRP.
After these chaotic events in the past weeks, the market outlook showed a high fear index. As a result, bitcoin mining takes a beating as events continue to unravel each day.
Hash Ribbon Forms a Dead Cross – What Does It Mean?
The hash ribbons – a technical indicator – formed a so-called “death cross”, which previously indicated bitcoin miners buckling under pressure. These indicators use simple daily moving averages to unravel any changes in hash rates.
Hash tapes are famous for long-standing applications to identify macro funds on a Bitcoin chart. The formation of a bearish cross signals a strong downward trend. It means that hash rates will decrease from the previous optimal levels.
According to Charles Edwards on Twitter, the miner surrender is a fallout from the $10 billion FTX scam and collapse. Will Clemente, an industry analyst, observed the signal stating that “we may be entering a capitulation period of a double-dipping miner.”
A similar event occurred in June 2022 with the formation of a death cross after the collapse of Luna. Glassnode reports that the seven-day moving average hash rate stands at 13.7% below the all-time high value.
The mining difficulty will now vary by -9% in the coming week. Hash rates have dropped dramatically as more miners begin to shut down their mining rigs. The hash rate today stands at 234 EH/s (exahashes per second.
The mining difficulty is at its peak of 36.9 T. this figure will reduce with the hashrate falling and the competition between miners reducing. However, mining profit (hash price) is the worst hit at $0.056 per day for every TH/s.
Profit decreased, with 82.55 decrease observed within a year. In addition, miners surrenders tilt to the bears and add more selling pressure leading to the price of BTC to fall soon.
Bitcoin Price Update
The price of Bitcoin has shown signs of a slight revival today. Despite a brief rebuke on Sunday, the price has firmed in the $16,000 to $17,000 range.
The impact of FTX on the market is the main cause of the latest decline. BTC is 76.5% off its November 2021 high and is trading at a two-year low.
The current crypto market closely mirrors the bear market of late 2018 after the capitulation in November of that year. With such an unexpected turn of events, a bullish rally may not last for a while.
With the bearish cross in the hash bands, pessimism is increasing for crypto prices. With lower rewards for miners, it is most likely that more miners will close shop in the coming weeks.
Featured image from Pixabay, chart from TradingView.com