Bitcoin drops by 3% as 100,565 traders lose $262 million
Bitcoin prices experienced a significant drop during early morning trading, falling 3% before partially recovering to $58.8K in Asia. This decline coincides with the ongoing return of over 137,000 Bitcoin to Mt. Gox creditors, raising concerns about potential sell-offs and government intervention in seized crypto holdings.
Investor uncertainty surrounding the fate of these recovered Bitcoins has triggered a sell-off, leading to the liquidation of $261.98 million worth of crypto assets in the past day. The global cryptocurrency market capitalization also dipped by 3.62% to $2.17 trillion.
Miner Capitulation Signals Potential Market Bottom
Bitcoin miners, facing dwindling profits due to the recent price slump, are exhibiting signs of capitulation, which could indicate a nearing market bottom. This follows a period of intense sell pressure and a significant decrease in mining revenue.
The April halving, which reduced the number of new Bitcoins awarded to miners, has exacerbated these financial strains. As a result, miners are likely to continue selling their Bitcoin holdings to offset operational costs.
Bitcoin is trying to maintain its current $58.8K price. It has been climbing gradually since it hit this level and is now back above the $60,000 mark.
Data provider CryptoQuant believes that given the numerous signs suggesting capitulation following a period of intense sell pressure, this will likely occur again shortly.
Both hash rate and mining revenue by hash (hash price) have significantly decreased this month; the hash rate has decreased by 7.7% since the halving, at a time when the hash price was practically at an all-time low. These decreases are a sign of miner capitulation.
Consequently, the so-called halving that occurred in April, which reduced the number of new tokens that operators receive in exchange for their labor, is still having a negative financial impact on the owners of the power-hungry computers that support the Bitcoin blockchain. Selling some of their token stock is one way that these Bitcoin miners are responding.
