Bitcoin price falls and miners capitulate before Halving

  • Faced with the fall in Bitcoin (BTC) prices, smaller miners have decided to withdraw.
  • Halving will take place next year. This could have influenced the decision of the miners.

The present state of the Bitcoin price has had a negative impact on miners less able to adapt to the fall in prices. For this reason, there has been a significant increase in the amount of sales of mining rewards. It is suspected to be a series of capitulations by smaller miners, unable to stay afloat under the current situation.

Small miners sell their rewards for Bitcoin price drop

Since Bitcoin reached its historical price peak (around 20 thousand USD) in 2017, the BTC price has been fluctuating. In 2018 its value experienced a significant fall. A year ago, around the same date, it was already heading towards 3000 USD. This year the price has recovered, but the mining sector has remained in a state of suspense.

Recently, the situation for small-scale miners seems to have taken a negative turn. There has been a significant sales flow from the mining wallets. In total, the sum would be 20 million. This would be the second most relevant figure for the current year.

The movement in mining wallets has led to the conclusion that many small miners are pessimistic about the current market outlook. Although, as mentioned above, BTC prices have been recovering, it is still not at a point where sustainability can be achieved for smaller mining pools.

The situation is different for the miners with more resources. They can stay afloat, despite the current market state and constant price fluctuations.

The Bitcoin network is currently reaching its peak with miners producing more than 90 quadrillion hashes. However, a very reduced share of the rewards is acquired by smaller miners. This makes it impossible for them to stay in the market and be forced to capitulate, in other words, sell their rewards and empty their mining wallets.

Halving is the tipping point for the Bitcoin miners

Next year, in May, one of the events most awaited by the cryptocommunity will take place: the Halving. When it happens, there is always a movement of capitulating miners. This is because the reward for which the miners compete is very limited. Faced with that reality, the smaller miners would have gone ahead. Getting their rewards before the Halving.

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Bitcoin Jack, through his Twitter account, made a series of predictions about the price of Bitcoin. The analyst considers two scenarios in which the price of Bitcoin continues to fall and the capitulations of the miners will carry on, for this reason. In addition, he said that much larger on chain transactions will be recorded.

The capitulations will reduce the difficulty, another important factor, and other miners could benefit. However, for the current trend to change, even more miners will need to capitulate.

The price of Bitcoin stands at $7,067 USD and has fallen 9.66% in the last 24 hours. If the above predictions are correct, it should continue to fall. This trend could be the catalyst for a new Bull Run that continues to drive Bitcoin adoption.

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About Author

Reynaldo Marquez has closely followed the growth of Bitcoin and blockchain technology since 2016. He has since worked as a columnist on crypto coins covering advances, falls and rises in the market, bifurcations and developments. He believes that crypto coins and blockchain technology will have a great positive impact on people's lives.

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