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Home Cryptocurrency news

Massive Bitcoin Miner Capitulation Could Act As Launchpad For Bull Market

Tony Spilotro by Tony Spilotro
12 months ago
in Cryptocurrency news, Bitcoin
Reading Time: 3min read
bitcoin mining capitulation
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Bitcoin price is once again trading at a level at which miners are making a profit from operating their expensive mining machinery, however, lower prices are still causing capitulation amongst the weakest miners with access to more expensive energy sources than the most elite.

The mass capitulation is likely only to continue, as the cost of production will double overnight come May 12 when Bitcoin’s halving hits. The mass capitulation in the past has acted as a launchpad for each new bull run and the last round of capitulation could cause a repeat of the crypto hype bubble that put Bitcoin on the map.

BTC Hash Ribbons Point to Miner Capitulation Ahead of Halving

Many crypto investors have since written off that halving as a bullish event, ever since Bitcoin did the unthinkable and plummeted over 50% to under $4,000 on Black Thursday last month, due to the pressure of coronavirus panic.

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The selloff crushed stocks, commodities, crypto, and more. It also cut Bitcoin price down so low, the crypto asset began trading at price below the cost for most miners to produce each BTC through a process called mining.

Related Reading | Crypto Countdown: Exactly Three Weeks Remain Until The Bitcoin Halving

Bitcoin miners take on energy costs and upfront costs of equipment to generate more and more BTC. It is only profitable when the cost per BTC is higher than the cost of production.

bitcoin price chart miner hash ribbon crypto halving

During the latest crash, miners were better off buying Bitcoin off exchanges, and it prompted many of the smaller time operations to shut off their machines, essentially waving the white flag and capitulating. This capitulation can be seen using an indicator called the Hash Ribbons, and they’re currently showing one of the most severe periods of capitulation yet.

bitcoin price chart miner hash ribbon crypto halving

Post-Capitulation Buy Signal Tends to Kick Start Each Bitcoin Bull Market

Hash Ribbons may be showing mass capitulation, but that may be a positive thing in the end for Bitcoin. Capitulation removes the weakest miners from the market, allowing more efficient miners who are less likely to sell at lower prices. These elite miners can afford to hold out until Bitcoin price is marked up during the next bull market to begin unloading their assets at a massive profit.

Related Reading | Crypto Market Cycle: Data Shows Bitcoin On Pace For Post-Halving Bull Run

In the past, each time the Hash Ribbons signal calculation, a buy signal is issued after, and Bitcoin price skyrockets. During the previous bear market cycles, miners give up three times according to the indicator, before a bull market begins.

Bitcoin price just caused miners to capitulate for the third time, and when the buy signal triggers, the next major crypto bull market could finally be here.

 

Tags: bitcoinbtcusdcryptohalvinghash ribbonsminers
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Tony Spilotro

Tony Spilotro

I'm Tony Spilotro. Behind the pseudonym, I'm a global remote work leader with a decade of award-winning content experience and excellence. Here, I explore my newfound passions pertaining to privacy, finance, economics, politics, cryptography, property rights, and other libertarian-esque views. I am a Bitcoin evangelist, maximalist, and educator whenever I can be, helping to spread its message of freedom from government control, monetary policy mismanagement, and passing the buck - literally – to future generations. My journey from a curious retail crypto investor to a serious Bitcoin advocate, trader, and technical analyst is an unusual one, but life-changing nonetheless and has become less about money and more about a long-overdue revolution. While a firm believer in the laws governing math and science, I am profoundly fascinated by the impact of astrology and astronomy including moon and solar cycles and planetary alignment and their ability to influence and potentially predict markets. It hasn't yet clicked for me as to how to put anything to use, but I consider it my current rabbit hole I can't yet dig out of. My perspective of growing up alongside the internet, the dot com era, the Great Recession, and roots in video games collecting coins and rare items caused Bitcoin to immediately make sense to me. Through all of these lenses, I seek to produce content that is educational and entertaining, and I thank you sincerely for taking the time to read what I have to say. Please follow me on Twitter and feel free to drop me a line if you would like to work together.

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