Categories: Bitcoin

Bitcoin Mining is Capitulating now. What is bitcoin facing now?

Bitcoin miner capitulation comes as it always does come what may. You can’t escape it whatever you try to do. A cryptocurrency analyst, Charles Edwards, recently spotted a bearish inversion in the health of Bitcoin networks hash rate through the Hash Ribbons. This can greatly affect the cryptocurrency market and if the history repeats itself, the prices are gonna stoop even lower for the next coming days, even weeks.

What does Bitcoin miner capitulation mean?

Before we discuss the assumable turnout of current conditions, let us know what bitcoin miner capitulation is.

Capitulation translates to surrender. The miner capitulation is when miner operations slow down because of the shutting down of mining by small scale miners who do not have much capital. Technologically speaking, their mining machines become outmoded.

When this occurs, the miners are unable to earn anymore and hence, cannot upgrade their systems according to the future needs anymore more which leaves them with no choice than to sell their mined Bitcoins (BTC) to keep going on.

This does not sound innoxious at all. It is reasonable to understand that miners will need to sell their bitcoins to keep with their expenses. But what happens if the majority of the miners sell at once? This can lead to a vicious cycle as Cole garner, an analyst, says

“Undercapitalized miners panic sell, price dumps, longs get squeezed, stop losses cascade – then more miners lose their lunch.”

Inversion of the Hash Ribbons, which approaches bearish threshold signals that capitulation is happening at the moment the number of active miners is decreasing.

Where is Bitcoin headed?

Historical analysis indicates that, according to the data, the cryptocurrency market is going to suffer in the coming time. In 2018, when bitcoin price nearly halved from 6000 USD to 3000 USD, the Hash Ribbons had inverted just a few days ago, according to NewsBTC. Not only that, but Cole Garner also pointed out that the inversion of Hash Ribbons that occurred in 2016 also resulted in a 30% decline as well.

However, it is important to note that the 30% drop might also have occurred due to some other reasons as has occurred in 2012 when macro bull trend caused mini capitulation events and the price dropped down to 10-20% for a brief period.

This could also possibly mean that the current turn of events is going to result in a mini capitulation. Results will be more evident as time passes.

This post was last modified on November 22, 2019 2:19 am

Ahsan Khalid

Blockchain Developer. An Electrical Engineer with majors in software development. I present forward my insight regarding the latest happenings of the blockchain world. All views on my articles are my own. Email: ahsan@blockpublisher.com or editor.news@blockpublisher.com

Leave a Comment
Share
Published by
Ahsan Khalid

Recent Posts

The Poor Man’s Gold – 30% Gain in a Month

It’s called the “poor man’s gold”. Yet, there’s nothing poor about silver’s performance this month,…

July 31, 2020

S&P Futures Falls, European Markets Tumble After German GDP Crashes

S&P futures tumbled, European stocks slumped to a three week low, 10Y Treasury yields dropped…

July 30, 2020

The EU is Fixed, The U.S. Dollar is Fucked.

Dyin’ ain’t much of a livin’, boy The Outlaw Josey Wales The Davos Crowd is desperate.…

July 30, 2020

How the Twitter Hack Impact Bitcoin’s Reputation

Bitcoin remains the poster boy for cryptocurrency, with this token having blazed a trail for…

July 30, 2020

Bitcoin CME Gaps – Why Are BTC CME Gaps Important?

Bitcoin CME gaps have been a prevalent topic of interest for many investors over the…

July 29, 2020

Why Bitcoin & Cryptocurrencies Fluctuate in Price

The cryptocurrency market is known for its volatility. Anyone following bitcoin since its inception will…

July 16, 2020