Bitcoin has dropped below the 200-day Simple Moving Average (SMA). Usually, when the market trades below the 200-day SMA constantly, it is assumed to be following a downtrend pattern.
Bitcoin (BTC) price has seen intense selling pressure this week, contributing to its fall to levels last seen a few months ago. The flagship cryptocurrency went below $54,000 recently, causing investors to feel jitters. At the time of this writing, BTC was trading at $54,266.04 with a 7.85% drop within the last 24 hours. The persistent fall of Bitcoin price has once again pushed many mining rigs out of profit.
Antminer And Avalon Bitcoin Mining Rigs in Profit
According to insights from a graph shared by mining giant F2Pool, only about five mining rigs are still recording gains from their operators. Precisely, the graph showed that four of Antminer’s various rigs and one Avalon rig are profitable. However, they remain so for as long as prices are above $53,100.
“At a rate of $0.08/kWh, ASICs less efficient than 23 W/T operate at a loss,” F2Pool said in a graph.
Other mining rigs are at a loss because their running costs far outweigh their operators’ earnings in the form of rewards. Notably, as entities that supply computing power to different blockchain networks, miners are entitled to “rewards” as incentives for their service. Once they receive these rewards, which usually come as BTC, they then sell them off to cover their operational cost.
Meanwhile, mining operational costs like electricity bills are relatively expensive and have caused many mining facilities to file for bankruptcy in the past years.
Miners contributed significantly to the Bitcoin price selling pressure that the crypto ecosystem saw last month. Quite a number of them sold up to $1 billion worth of BTC in two weeks. This selloff comes at a time when the price of the coin fluctuated between $65,000 and $70,000.
With the mining market suddenly becoming unprofitable, some market observers say it could be a sign of a local bottom. They made this point on the basis that there is currently less selling pressure. Dovey Wan, a partner at digital assets fund Primitive Crypto, was one of those market observers who took to X to share their opinions about the unprofitability of mining rigs and their operators.
“Bitcoin miners are (an) inch away from capitulation, S19 break even at 52k,” Wan outlined in his X post on Friday. “This is a perfect setup for the local bottom.”
Bitcoin Price Drops below 200-Day Simple Moving Average
As it stands, Bitcoin has dropped below the 200-day Simple Moving Average (SMA). Usually, when the market trades below the 200-day SMA constantly, it is assumed to be following a downtrend pattern. On the other hand, those that trade above the average are considered as heading in a bullish direction. A glance through the market shows that the firstborn digital currency is in sustained downtrend mode.
If Bitcoin does not find a support level, it may head to $52,000 or even less as crypto critic Peter Schiff speculated.
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