Typically described as the "HODLing" block of the crypto world, miners have been having a rough patch with the recent realities in the market. Worsening market conditions are causing Bitcoin miners to shift their HODLing stance to survive the crypto winter.
Reports show that miners have come under intense pressure to the extent that many of them face the real threat of flunking out of the business. The steady decline in the price of Bitcoin this year, coupled with growing mining difficulty and rising energy costs, has forced many miners to abandon their stance as long-term holders.
Coinglass Data Shows BTC Is Moving From Miners’ Reserves to Exchanges
On-chain data from crypto analytics company CryptoQuant shows that over 10,000 BTC has moved from the reserves of several mining pools to crypto exchanges as of December 1. This indicates that miners are liquidating their holdings rapidly for various reasons.
Moving tokens from miners’ reserves to crypt exchanges is a notably bearish telltale sign and speaks volumes of the existing sentiment towards the benchmark cryptocurrency.
Environmental Concerns Weighing on Crypto Mining Industry
Apart from the obvious crypto winter factor, other factors are exerting intense pressure on the crypto mining space. One such factor is the growing environmental concerns about mining crypto by environmental conservationists, which has prompted many blockchains to pivot from the mining-intensive proof-of-work validation mechanism to the more environmentally friendly proof-of-stake consensus mechanism.
Ethereum is the most recent of such pivots after the largest blockchain ecosystem in the crypto space moved to a PoS system in mid-September.
Russian Miners Enjoying the Benefits of Cheaper Electricity
In other news, a recent report from Kommersant shows that many Russian miners are mopping up unwanted or underutilized Bitcoin mining rigs at a significant rate. The reports revealed that the sale of ASIC miners increased dramatically in Q4 2022, despite the prevailing crypto winter in the market.
Russian miners are reportedly buying these miners significantly because they have access to cheap electricity. That said, as many miners across the globe struggle with rising energy costs and increased difficulty, miners in Russia are enjoying better conditions.
Due to the affordable price of the equipment, more ASIC crypto mining rigs are being assembled. As a result, local ASIC prices have decreased, motivating many miners to buy more.
Bitcoin Is Struggling to Stay Afloat
As mentioned earlier, the price of Bitcoin is under significant pressure as the benchmark cryptocurrency fights to go below the $15,600 support line.
Considering this is the lowest support in two decades and thus very critical, a break below this level is likely to open Bitcoin up for massive price dumps, which would further worsen realities for miners.
On the flip side, only a return to above the $20,000 psychological level could ease the bearish pressure slightly for BTC. However, this seems like a long way off at this point, given the existing trading volume and momentum in the market.
At press time, Bitcoin is trading around the $17,000 mark and has done so for the past five days. What could happen next?
BTC Statistics Data
BTC Current Price: $17,000
BTC Market Cap: $328.9B
BTC Circulating Supply: 19.2M
BTC Total Supply: 21M
BTC Market Ranking: #1
This article should not be taken as financial advice. It is essential to conduct research before making any investment decisions.