- Bitcoin price has crashed from nearly $30,000 to $25,000 in under 48 hours, causing massive liquidations.
- A close look at miner statistics reveals that another leg of this crash might be brewing if things do not improve.
- A continued spike in BTC’s hash rate pressures miners to sell their holdings.
Bitcoin price drop to $25,000 has caused massive liquidations for traders in a few hours. But this bearish move of varying magnitude could repeat, especially if BTC’s hash rate rises and the price fails to recover quickly. If the pressure off BTC miners’ is not taken off soon, these participants could shed their holdings, causing the second down leg.
Bitcoin miners could trigger the next BTC price crash
Bitcoin’s 7-day average hash rate hovers around 409 million TH/s and shows no signs of slowing down. With falling BTC prices, a higher hash rate would make mining an expensive process. Bitcoin miners will be forced to sell their BTC holdings if this condition remains unchanged.
BTC hash rate
While the hash rate continues to climb, miner reserve, aka the amount of BTC held, also skyrockets. In the last leg of the Bitcoin rally from roughly $26,000 to $31,500, the miner reserve shot up from 1.82 million BTC to 1.84 million.
The 200,000 BTC currently sits with miners and has come after the recent crash. If conditions do not improve in favor of miners, these BTC could flow to exchanges where they will be sold.
BTC miner reserve
Therefore, investors must be cautious and pay close attention to Bitcoin price. Should the recovery rally delay with the hash rate remaining high, it could trigger a selloff.
More on Bitcoin price targets for the second leg: Bitcoin volatility at all-time lows despite a 15% crash, is a recovery rally on the cards or more downside?
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.