Bitcoin miners are not capitulating despite the price of the leading cryptocurrency’s price plunging over 15% in the past week, new data indicates.
According to estimates of bitcoin’s hash rate from monitoring resource Coin Dance, participation remains as strong now as before the price drop, Cointelegraph reported. Hash rate refers to the amount of computing power dedicated to maintaining the bitcoin network.
2nd all-time high
According to some measures, the hash rate on November 23, in fact, nearly matched its previous all-time high. At 134 quintillion hashes per second, Saturday’s reading was almost identical to the one recorded on October 10.
BTC/USD traded at around $7,200 on that day, compared to $8,600 in October.
Previously, Cointelegraph reported on the rising consensus that Bitcoin miners were exiting their positions as losses mounted. According to statistician Willy Woo, that process was nearing completion this week.
Taking an opposing position based on the fresh data, entrepreneur Alistair Milne suggested miners were not very concerned about the current price action.
“There is NO miner capitulation,” he tweeted on Sunday.
“They are acutely aware of the upcoming halving and are apparently unphased by the recent dip.”
There is NO miner capitulation
They are accutely aware of the upcoming halving and are apparently unphased by the recent dip pic.twitter.com/krtabGCuVx
— Alistair Milne (@alistairmilne) November 23, 2019
Milne also linked it to the increasing difficulty in mining bitcoin, an indicator that had been in decline until recently.
Mining difficulty is a measure of the effort required to solve bitcoin block equations that regularly changes in accordance with shifting miner sentiment. Earlier this month, miners experienced their biggest drop of the year – 7%. Since then, a roughly 2% uptick likewise contradicts the idea that miners are staying away, according to Blockchain figures.
For analyst PlanB, creator of the highly-popular stock-to-flow bitcoin price model, difficulty trends also point to continued faith in mining profitability.
“+2% difficulty adjustment: no miner capitulation,” tweeted on Friday, adding that the historical precedent called for a price rise after such behavior.
+2% difficulty adjustment: no miner capitulation.
Historically blue followed by yellow/red indicates a temporary downwards difficulty adjustment, hashrate & price have in the past increased from this point. pic.twitter.com/JAgECasC0P
— PlanB (@100trillionUSD) November 21, 2019
According to Crypto This’s real-time difficulty generator, the next adjustment on December 5 could be almost 5% higher than current levels.
Unlike difficulty, the hash rate is challenging to accurately estimate and should therefore not be taken as a definitive guide to miner involvement.
A steady increase in computing power indicates that the reduction of bitcoin price does not stop miners, NewsLogical reported. Although at this stage, cryptocurrency mining on some ASIC models is already unprofitable. For example, the break-even point of the Antminer S9 is $7,500. Miners are probably betting on a long-term price rebound due to the 2020 halving.