Miner Capitulation Claims Intensify After Bitcoin Dump

Prominent Bitcoin supporters have claimed that miners are “capitulating”, resulting in a “vicious cycle” of negative price action. Predictions of 50% price crashes, falling hashrates, and miner desperation have started doing the rounds, with the 2020 halving catalyst also suddenly coming into question. Is there any truth in these rumors or is it just plain old FUD?

2020 Halving Impact Could be Negated by Bearish Setup

Bitcoin researcher Willy Woo raised the issue on Tuesday when he posted a Twitter thread which went into some detail regarding Bitcoin’s recent bearish price action and the decreasing hash rate. Woo stated Bitcoin has always had a bullish setup entering into a halving period, with “weak miners” having already sold out and the market having bottomed. This allows for the conditions needed to pump the price via the halving catalyst.

The difference this time round, says Woo, is that just six months out the price is still in a period of downturn, coming off the unexpected jump to $14,000 and the subsequent 50% drop. Miners using older and more obsolete mining equipment are struggling to make a profit at current prices, which is “killing off weak miners who are dumping and dying”, perpetuating the alleged capitulation. All of this means that the charts doing the rounds showing BTC hitting $50,000-$100,000 based on the halving catalyst are starting from a bullish entry point, which is currently not the case.

Reduced Hashrate Could Signal Quick Crash

Woo found a supporter in this theory in crypto analyst Cole Garner, who echoed the theory that miners are capitulating. Cole suggests that Bitcoin is “dangling on a cliff” due to the hashrate being on the point of inversion, which he calls a “leading indicator of miner capitulation.” Should the hasrate fall, claims Cole, cash-desperate miners will sell their BTC gradually “then all at once”, causing a BTC price crash.

At this point, Cole says, we need to look at the “macro range’s volume point of control” for a support range, which he puts at around the $6,500 mark. Cole adds that although the hashrate could reverse he observes that we have “*never* been so close to inversion for so long without going over the edge”, and that the last time it happened was two weeks before the $6,000 floor collapsed around this time last year.

All is Not Lost

While reading this could easily be enough to throw in the towel and sell all your BTC, just hold on for a minute. Cole adds that should a hashrate inversion and a drop occur, it will result in a “generational buying opportunity” and will likely represent “the last time we *ever* see prices that low”. Secondly, were we to experience a quick price collapse we would not only fulfil Woo’s criteria for a halving-based catalyst but we would also be repeating the 50% drop that occurred before the record-breaking run to $20,000 in 2017 and would. Rocket emoji, please…

 

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