Amid the collapse of crypto exchange FTX, there’s massive selling pressure seen for Bitcoin (BTC) and the broader crypto market. The Bitcoin price has corrected more than 21% this month as it turns out to be the worst November for Bitcoin so far.
Bitcoin miners have suffered the maximum during this massive price correction. On-chain data suggests that the Bitcoin miner capitulation has officially begun hinting at further pain ahead in the price of BTC. Bitcoin miner capitulation is a scenario that occurs when the Bitcoin price drops wherein it becomes difficult for some miners to hold the BTC profitably. As a result, they are forced to sell and move off the network.
On the other hand, the Bitcoin hash rate has started to turn over. On a 7-day moving average, the BTC hashrate is 13.7% off its all-time high. The next Bitcoin mining difficulty adjustment, a week from now, shall see -9% adjustment. This is clearly the sign of an early stage of Bitcoin miner capitulation.
Courtesy: Glassnode
In another chart below, we can see that Bitcoin miners have been selling aggressively over the last month. This coupled with the collapse of the crypto exchange FTX has led to further selling pressure on the BTC price.
Courtesy: Glassnode
More pain Ahead With Bitcoin Miner Capitulation?
Several analysts have been pointing out that the contagion of the FTX collapse will further spread to other crypto firms. This could lead to further bleeding for Bitcoin and the overall crypto space. Analysts are expecting that as the FTX contagion spread, the BTC price could touch as low as $5,000.
The Bitcoin bottom could take another 3-6 months from now. Popular crypto analyst IncomeSharks reported : “Bitcoin – When it’s outside factors that drop the price it usually can form V shape reversals (Covid). When it’s internal events (FTX, 3AC, Luna), we most likely see bottoms that take 3 to 6 months to form. Expect slow and boring, spot over leverage”.
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