Bitcoin miners got some breathing space amid falling mining difficulty
- Bitcoin mining difficulty and hash rate decrease and brag down break-even price.
- The majority of miners are still operating at a loss.
- BTC/USD recovery is capped by $3,900.
Bitcoin mining difficulty dropped 15.3% at the beginning of December demonstrating the second deepest decline on record. This development came on track of decreasing hash rate and brought some relief to Bitcoin miners who suffer from poor to no profitability amid the crypto market collapse.
According to Sam Doctor from Fundstrat Global Advisors, lower mining difficulty pushes Bitcoin mining breakeven price lower.
“Our model suggests the cash cost of mining each BTC on the Antminer S9 is now $4500, down from $5300 in September,” he wrote. The Antminer S9 refers to specialized computer hardware used to mine for bitcoins and other digital assets.
“Depreciation expense has fallen to $1300 vs. $2000 in September, reflecting a lower rig cost as newer devices have come to market. Fully loaded breakeven is now $5700, compared with a breakeven of $7300 in September.”
While this is a welcoming development for miners, the break-even is still much higher the current market price, which means that small payers will continue leaving the market.
BTC/USD is changing hands at $3,850 at the time of writing, down over 1% since the beginning of the day. The coin is supported by $3,800, though once it is cleared, the downside may be extended towards Tuesday's low at $3,732. The local resistance is created by $3,900-$3,920 congestion zone that includes SMA50, 1-hour. It needs to be cleared before the price can proceed to critical $4,000.
BTC/USD, 1-hour chart
Author
Tanya Abrosimova
Independent Analyst
