The power outage in North China on April 15 led to a sharp decline in the Bitcoin mining hash rate up to 20% as the majority of Bitcoin mining farms are concentrated in China. The decline in mining hashrate has led to a major backlog in transaction processing as well, leading to a mounting transaction fee. The high mining fee has earned Bitcoin miners nearly $16.7 million over the past 24-hours.
Bitcoin miners' fees have increased significantly. The fees paid to Bitcoin miners in a single day amounts to $16.76303mln. The core reason is that the power outage and inspection in Northwest China has reduced the 20% hashrate, resulting in a backlog of transactions. pic.twitter.com/euw7APqi4b
— Wu Blockchain (@WuBlockchain) April 21, 2021
The backlog has limited the number of transactions that can be verified in a given period, as a result, some people have even complained about their transaction being pending for over 9-hours. Many have attributed the recent Bitcoin price correction to the mining outage in China leading to a war of words among analysts on the impact of the mining power outage.
The controversy started when many claimed that the Bitcoin network’s hashrate dropped by 40% on April 18, however, others pointed out the fact that the Chinese power outage took place on April 15 and the drop in mining hash power was not more than 20%.
Would Bitcoin Bounce Back?
The network clogging caused by mining power deficiency has been a topic of discussion in the crypto-verse over the past week as Bitcoin retraced to sub-$54K levels from its new ATH of $64,683. Apart from the mining hashrate drop most of the on-chain signals are still flashing bullish with the exchange supply of BTC seeing a continuous decline.
Bitcoin price is currently consolidating above $55k with $54K being the immediate support. With a drop of nearly 10% on April 18, the correction was nothing out of the ordinary as the top cryptocurrency has seen correction in upward of 25% this by season. In comparison, the 2017 bull market saw a total of 12 dips ranging from 10% to 25% and 6 major corrections ranging between 30%-40%. While during the ongoing bull run BTC has experienced only one such major pullback, thus indicating the market is still strong enough to continue the bull run.
In 2017, #BTC had 5 major Bull Market corrections that were -30% to -40% deep
In 2021, BTC only had one -31% Bull Market correction
— Rekt Capital (@rektcapital) April 20, 2021