Bitcoin Bloodbath: Miners Start Selling Most Aggressively In The Last 7 Years
The recent crash in the price of bitcoin has distressed bitcoin miners. They are compelled to sell in order to cover their expenses.
In the past three weeks, Bitcoin (BTC) miners have increased their selling pressure by 400%. This indicator reached new highs, not seen since the bottom of the 2015 cycle, nearly 7 years ago.
Charles Edwards, the founder of Capriole Investments, a quantitative Bitcoin and digital asset fund, took to Twitter to reveal the distress that the BTC mining fraternity is going through.
Edwards presented charts showing the Bitcoin (BTC) price, mining expenses (log scales), and the amount of Bitcoins (BTC) miners are selling. It appears that the entire segment is having a difficult time.
Miner’s Distress
According to him, if the price of Bitcoin does not improve in the coming weeks, many miners would be compelled to cease operations due to huge losses.
He argues that mine-and-hodl is not a sustainable strategy for Bitcoin miners. Edward holds the “never selling” attitude of miners responsible for the current situation.
“Miners are paying the consequences of the “never selling” arrogance widespread just 6 months ago. You need to manage (trade) your Bitcoin position constantly in this market” he adds.
What we are seeing is not sustainable. Mine-and-hodl is not a viable strategy as a Bitcoin miner. Miners are paying the consequences of the "never selling" arrogance widespread just 6 months ago.
You need to manage (trade) your Bitcoin position constantly in this market.
— Charles Edwards (@caprioleio) November 21, 2022
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Furthermore, this difficult period indicates that Bitcoin mining can no longer be deemed “passive income.” Miners should re-evaluate their strategies to avoid becoming bankrupt.
Charles Edwards reported earlier this month that Bitcoin (BTC) appeared to be severely oversold based on the Energy Value Model.
According to a report, an Australian mining firm, Iris Energy, had to unplug hardware as it defaulted on its loan due to insufficient cash flow. This makes the distress more evident, which can grapple the sector in coming weeks.
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