During Sunday's violent cryptocurrency crash, Bitcoin dumped 12.5% in a matter of hours sliding from $61,450 in late trading on Saturday to bottom out at $53,750 the following day. This has been rumored to have been caused by a sudden drop ...
9 minutes
During Sunday's violent cryptocurrency crash, Bitcoin dumped 12.5% in a matter of hours sliding from $61,450 in late trading on Saturday to bottom out at $53,750 the following day. This has been rumored to have been caused by a sudden drop in hash rate resulting from a power outage in the Chinese region of Xinjiang.
Xinjiang is a major source of global Bitcoin hash rate, as the region currently represents nearly 36% of China’s combined hashing power. With China comprising two-thirds of global mining power, Xianjian comprises 23.3% of the global hash rate.
The hashing power of top Bitcoin mining pools located in Northwest China appears to have dropped due to a regional blackout for safety inspections. The inspections follow a recent flooding accident at a coal mine in Xinjiang that saw 21 miners temporarily trapped at three different locations.
The mine was swamped in a sudden flood while making technical upgrades, resulting in communication interruptions and power outages underground. Nearly 1,500 rescue personnel were deployed to the mine to assist with the emergency.
As a result of these Power Losses significant drops in the hash rate of several major pools — with Antpool crashing 24.5%, Binance Pool dipping 20%, BTC.com falling 18.9% and Poolin dropping by 33%, were observed.The outages appear to have driven a roughly 2.2% drop in the Bitcoin network’s combined hash rate in the past 24 hours, which has slid from 169.4 million terahashes per second, or TH/s, to 165.8 TH/s at the time.
However, not everyone agrees with these rumors, that just a mere power outage caused the crash. More so, just before the outages, nearly 9K BTC was moved into Binance from a cold wallet. The selling pressure of these two events combined however, was enough to tip the price below liquidation levels around $59K which triggered a cascade of automatic sell-offs as stop losses were hit. And in fact long-term whales who rarely sell have been buying heavily amid the dip, with the lower $50,000 range forming “the largest cluster of price discovery since BTC was below $10k.”
Written By
Jay Sharma
Jay is a seasoned crypto entrepreneur and technology innovator. As the Founder and CEO of Botsfolio, he has been at the forefront of the blockchain revolution since 2017. His practical experience extends to the technical nuances of crypto mining, having successfully built and managed a substantial GPU mining operation. Jay developed a groundbreaking decentralised application for fractional real estate NFTs. This innovative project garnered significant recognition. Through his hands-on experience and analysis, he aims to provide valuable guidance and empower others to navigate the dynamic crypto landscape.
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