Did bitcoin crash happen due to a power outage in china?

04/25/2021

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.

The Outage

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.

But is it true?

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.”

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