Most Bitcoin Mining Rigs Now Unprofitable amid BTC Price Dip

As an experienced financial analyst, I believe the recent selling pressure on Bitcoin (BTC) and the subsequent price drop below the $54,000 mark is a cause for concern. The sharp decline in profitability for mining rigs, including popular models like Antminer and Avalon, further highlights the bearish sentiment in the market.

As an analyst, I’ve observed that Bitcoin (BTC) has experienced significant selling pressure this week, resulting in its decline to prices not seen since a few months prior. Recently, BTC dipped below the $54,000 mark, causing uneasiness among investors. At present, the price of BTC hovers around $54,266.04, representing a 7.85% decrease within the last 24 hours. The continuous downtrend in Bitcoin’s value has forced many mining rigs to become unprofitable once more.

Antminer And Avalon Bitcoin Mining Rigs in Profit

Based on data from a graph provided by mining titan F2Pool, approximately five mining rigs are currently yielding profits for their owners. More specifically, the chart indicated that four different Antminer models and one Avalon miner were generating profits. Nevertheless, this profitability persists only as long as Bitcoin’s price remains above $53,100.

“ASICs with an efficiency lower than 23 watts per kilowatt hour will incur a loss at a rate of $0.08 per kilowatt-hour, according to F2Pool’s graph.”

Many mining rigs struggle financially as their expenses exceed the income they gain from rewards. Miners play a crucial role in providing computational power to various blockchain networks, and in return, they receive “rewards” as compensation for their contribution. These rewards are typically paid out in Bitcoin or other cryptocurrencies, which miners then sell to meet their operational expenses.

During this period, the expenses associated with maintaining mining operations, such as electricity costs, have proven to be quite high and have led several mining facilities to consider filing for bankruptcy over the last few years.

As a researcher studying the Bitcoin market, I’ve discovered that miners played a significant role in the recent price selling pressure experienced in the crypto ecosystem. Within a two-week span, they offloaded approximately $1 billion worth of Bitcoin. This massive selloff occurred when the coin was trading between $65,000 and $70,000.

In light of the mining market’s sudden unprofitability, some industry analysts believe this could indicate a local market low. They arrived at this conclusion due to a decrease in selling pressure. Dovey Wan, a partner at digital assets fund Primitive Crypto, was among those who expressed their views on the current unprofitability of mining rigs and their operators through X.

“In his recent post on Reddit, Wan expressed that Bitcoin miners are just shy of reaching the point of giving up, with the S19 models breaking even at a price of $52,000. This situation sets the stage for a potential local minimum.”

Bitcoin Price Drops below 200-Day Simple Moving Average

In its current state, Bitcoin has dipped beneath the 200-day Simple Moving Average (SMA). Typically, when the price remains below the 200-day SMA for an extended period, it indicates a bearish trend. Conversely, when the price is above this average, it suggests an uptrend or bullish market condition. Based on this observation, Bitcoin appears to be experiencing a prolonged downtrend.

Should Bitcoin fail to identify a supportive price point, it could potentially drop to $52,000 or even lower, according to crypto skeptic Peter Schiff’s prediction.

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2024-07-05 14:26