power outage in china bitcoin

May 16 when Sichuan miners allegedly went offline, the total hash rate of the Bitcoin network has dropped from 172.36 million TH/s to 150.653 million TH/s.

[Image Here]

The impact of these Chinese mining facilities is further buttressed by the total miner revenue. On-chain analytics site Glassnode reports that the total miner revenue has dropped from 1.23 billion to 692.16 million, representing a nearly 50% crash.

[Image Here]

The timeline for the dropping hash rate from Chinese miners coincides with Bitcoin’s flash crash down to $37,000 on Wednesday. Although Musk’s tweets and massive futures liquidations played a part in last week’s sell-off, the power outage in Sichuan is likely the culprit behind this week’s bloodbath.

As of press time, the region’s state grid is yet to provide a timeline on when the current power bottlenecks will be resolved.

Power outage in china bitcoin

During Sunday’s violent cryptocurrency crash, Bitcoin dumped 12.5% in a matter of hours sliding from $61,450 in late trading on Saturday to bottom out at $53,750 the following day. This has been rumored to have been caused by a sudden drop in hash rate resulting from a power outage in the Chinese region of Xinjiang.

The Outage

Xinjiang is a major source of global Bitcoin hash rate, as the region currently represents nearly 36% of China’s combined hashing power.
With China comprising two-thirds of global mining power, Xianjian comprises 23.3% of the global hash rate.

The hashing power of top Bitcoin mining pools located in Northwest China appears to have dropped due to a regional blackout for safety inspections.

Power outage china crypto

And whenever we have excess leverage in the system, it’s quite possible to experience such substantial drops. And this is exactly what happened as the market flushed all that excess leverage, with $1.847 billion in contracts liquidated in a matter of hours.

And this is almost twice as big as the previous all-time high of liquidations, which we experienced on 22 February.

Also, it’s interesting to observe how the short-term holders are behaving. And we can see that the Spent Output Profit Ratio reset the 0.985 level, which suggested some losses were taken.

But as you can see, whenever that ratio tests the level of 1, this is usually when the correction is over, and the uptrend in the Bitcoin cryptocurrency resumes.

Finally, what’s interesting to observe is that some of the long-term holders based on the same ratio have been taking profit in the $50,000 to $60,000 range.

More so, just before the outages, nearly 9K BTC was moved into Binance from a cold wallet. The selling pressure of these two events combined however, was enough to tip the price below liquidation levels around $59K which triggered a cascade of automatic sell-offs as stop losses were hit.
And in fact long-term whales who rarely sell have been buying heavily amid the dip, with the lower $50,000 range forming “the largest cluster of price discovery since BTC was below $10k.”

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Power outage in china bitcoiner

Hello and welcome, everyone. It’s Martin here with CryptoGains. Today, we’re going to discuss the recent drop in Bitcoin from three different angles, based on data provided from Glassnode.

First of all, one of the narratives around the correction in Bitcoin is around the substantial drop in hashrate that we experienced, which was largely attributed to a power outage in China.
As we can see, we started experiencing substantial decline in the hashrate starting on 16 April, reaching a low on 18 April. And this is just around the time when Bitcoin started correcting very deeply.
And that correction started normalising as soon as the hashrate started normalising, as well.

In addition to that, over the weekend, the Open Interest in Futures Contracts in Bitcoin had reached a new all-time high at $27.4 billion.

Power outage in china bitcoins

In April, Bitcoin crashed to $52,000 after crossing the $60,000 benchmark. Apart from the upcoming crypto regulations from the United States, several experts blamed the crash on a drop in hash rate.

As per the reports, there was a major power outage in Xinjiang, China, which disrupted the activities of Bitcoin miners.

Although many analysts have claimed that the recent crypto market corrections were fueled by an announcement from Tesla (NASDAQ:TSLA) and a clampdown on crypto mining activities by Chinese regulators, Bitcoin’s hash rate has dropped in Sichuan, China, following limitations on power usage.

Earlier this week, the State Grid in Sichuan’s Aba County issued a notice demanding that households and local enterprises limit their power usage amid surging utility demand.

Power outage in china bitcointalk

May 16 when Sichuan miners allegedly went offline, the total hash rate of the Bitcoin network has dropped from 172.36 million TH/s to 150.653 million TH/s.

[Image Here]

The impact of these Chinese mining facilities is further buttressed by the total miner revenue. On-chain analytics site Glassnode reports that the total miner revenue has dropped from 1.23 billion to 692.16 million, representing a nearly 50% crash.

[Image Here]

The timeline for the dropping hash rate from Chinese miners coincides with Bitcoin’s flash crash down to $37,000 on Wednesday. Although Musk’s tweets and massive futures liquidations played a part in last week’s sell-off, the power outage in Sichuan is likely the culprit behind this week’s bloodbath.

As of press time, the region’s state grid is yet to provide a timeline on when the current power bottlenecks will be resolved.

And what we’re aiming for here is a recovery above 50. So to me, the pivotal point is $2125. Above that level, initiating long positions, with the first target at $2150 and then $2210.

Conversely, below $2125, short positions with targets at $2080 and $2056.

Next, let’s take a look at Ripple. After almost reaching the level of $2, Ripple is now creating gains.

As we can see, the chart has been very volatile. Personally, I’m seeing $1.27 as the pivotal point, and I’ll be waiting for a break above that level before initiating long positions, with targets at $1.32 and $1.38. Conversely, below $1.27, I’m looking to sell Ripple, with a target at $1.18.

And finally, let’s take a look at one of the best performers over the last few days.

That’s Dogecoin.

Xinjiang that saw 21 miners temporarily trapped at three different locations.

The mine was swamped in a sudden flood while making technical upgrades, resulting in communication interruptions and power outages underground. Nearly 1,500 rescue personnel were deployed to the mine to assist with the emergency.

As a result of these Power Losses significant drops in the hash rate of several major pools — with Antpool crashing 24.5%, Binance Pool dipping 20%, BTC.com falling 18.9% and Poolin dropping by 33%, were observed.The outages appear to have driven a roughly 2.2% drop in the Bitcoin network’s combined hash rate in the past 24 hours, which has slid from 169.4 million terahashes per second, or TH/s, to 165.8 TH/s at the time.

But is it true?

However, not everyone agrees with these rumors, that just a mere power outage caused the crash.

But not everyone was reached the same consensus.

Willy Woo’s Remark On Bitcoin Hash Rate Affair

Willy Woo, the popular on-chain data analyst is of the opinion that the crypto-asset’s price and hash rate have always been correlated. Woo went on to explain that 9000 BTC was sent into Binance, on the same day as of the price crash.

While acknowledging that Binance more serves volume from Asia than the West, he speculated that the amount was sent in from a whale with “closer knowledge to happenings in China”.

Delving more into details, Woo also said that the market-wide meltdown was compounded by the sell-off of quarterly futures on derivative markets which was already underway as early as 13th April.

“The two combined sell pressures were sufficient to tip the price below liquidation levels ($59k).

Aba encompasses a significant portion of the state’s hydropower, and the notice was specifically targeting all operations located in the region’s “Hydro-electricity Consumption Industrial Demonstration Zone.”

For some perspective, these zones were specifically created by the government to incentivize “power-intensive industries” to use cheap hydroelectricity during the summer months. As expected, many Bitcoin mining facilities are reportedly operating in these industrial zones.

That being said, any activity that disrupts the power distributed to these facilities could potentially affect Bitcoin’s hash rate and ultimately, the price of the digital asset.

Connecting the dots

Data on Blockchain.com reveals that the total hash rate (TH/s) of the Bitcoin network peaked at 180.67 million TH/s on May 13, representing a 37% rebound from the April incident.

In April, Bitcoin crashed to $52,000 after crossing the $60,000 benchmark. Apart from the upcoming crypto regulations from the United States, several experts blamed the crash on a drop in hash rate.

As per the reports, there was a major power outage in Xinjiang, China, which disrupted the activities of Bitcoin miners.

Although many analysts have claimed that the recent crypto market corrections were fueled by an announcement from Tesla and a clampdown on crypto mining activities by Chinese regulators, Bitcoin’s hash rate has dropped in Sichuan, China, following limitations on power usage.

Earlier this week, the State Grid in Sichuan’s Aba County issued a notice demanding that households and local enterprises limit their power usage amid surging utility demand.

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