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  • The full scale of this decline was frankly huge and saw a number of major mining operations close down
  • Miners in China are starting to make the most of buying second hand (used) Bitcoin mining equipment and are striking deals with hydroelectric power plants.

A sudden decline in Bitcoin and cryptocurrency mining took place through 2018 for two key reasons. First of all, rising costs for energy and expensive mining equipment made the set up of mining operations far more costly than they used to be. Secondly and more importantly though, the decline in the value of Bitcoin set mining profits crashing. Because a single Bitcoin is worth far less than it used to be just one year ago, the action of mining went from a profitable one, to a financial drain and thus, people had to stop.

The full scale of this decline was frankly huge and saw a number of major mining operations close down – Bitcoin mining farms became too expensive to operate leaving miners out of pocket.

According to new reports however, there seems to have been a sudden uptake in the number of people buying cryptocurrency mining equipment. As people become more bullish about Bitcoin and as more investors are starting to see the light at the end of the (very long) tunnel, it seems that people could turn to Bitcoin mining once again.

According to Coindesk, miners in China are starting to make the most of buying second hand (used) Bitcoin mining equipment and are striking deals with hydroelectric power plants. A marriage of the two – cheap mining equipment and cheap power through an abundant water supply means that, with overheads down, Bitcoin mining could start to drive profits once again. With these hydroelectric power stations in operation, miners can expect to pay around $0.037 per kilowatt hour (kWh) for electricity, meaning they will be paying very little for the power required to run the mining rigs. One company behind this drive, Hashage, envisions a new wave of Bitcoin mining in China.

“Xun Zheng, the company’s CEO, told CoinDesk that over the past month the firm has been talking to individual miners and larger mining farms with a total demand of more than 1 million slots for deploying mining chips.    According to Zheng, individual miners on average are looking to host 1,000 to 3,000 units of mining equipment each, while larger farms are eyeing at a larger scale of over tens of thousands of machines.”


“He added although the exact electricity costs with local hydropower stations won’t be finalized until the end of March, miners have already started looking for resources and negotiating deals with mining farms before the season comes so that they have enough time to ship equipment to the mountains and set them up.”

Like many, Hashage have foreseen a new push towards Bitcoin mining, something that could prove to be lucrative in the instance that Bitcoin starts to move back up to that highly sought after $20,000.00 value. If Bitcoin does hit $20k, those miners will be very happy indeed.

Robert Johnson , 2019-12-04 02:01:00 ,

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NewsBlock © 2019 - 2020 All rights reserved.

NewsBlock © 2019 - 2020. All rights reserved.

While Bitcoin’s price seemingly moves without rhyme or reason — collapsing by dozens of percent and embarking on face-melting rallies on a whim — the cryptocurrency market is filled to the brim with fractals.

Related Reading: Analyst: Bitcoin Price Likely to Fall to Low-$8,000s as Chart Remains Weak

A brief aside: A fractal, in the context of technical analysis and financial markets anyway, is when an asset’s price action is seen during a different time. This form of analysis isn’t that popular, but it has proven to be somewhat valuable in analyzing Bitcoin.

One recent fractal popularized by a well-known cryptocurrency trader is implying that BTC is going to return to the low-$7,000s in the coming days.

Bitcoin Fractal Implies Retracement to Low-$7,000s

A well-known crypto trader going by “Tyler Durden” on Twitter recently posted the chart below, which shows that a Bitcoin price fractal may be playing out. The fractal has four phases: horizontal consolidation marked by one fakeout, a surge above the consolidation phase, a distribution, then a strong drop to fresh lows.

If the fractal plays out in full, BTC could reach the low-$7,000s again, potentially as low as $7,100. This would represent a 20-odd percent collapse from the current price point of $8,800.

It isn’t only a fractal that is hinting Bitcoin has the potential to visit its lows. As we reported on Saturday, Bloomberg believes that if the GTI Vera Convergence Divergence Indicator flips red, a downtrend could push the cryptocurrency back to $7,300.

Related Reading: Stephen Colbert Pokes Fun at Bitcoin in Monologue: Mainstream Gone Wrong?

Can Bulls Step In?

But again, many believe it is irrational to have such bearish interpretations of the cryptocurrency’s chart at the moment. As reported by NewsBTC earlier, Popular crypto trader Mayne recently noted that the “people waiting for $6,000” are irrational. He quipped that Bitcoin retracing and consolidating after its fourth-biggest bull move in history ($7,300 to $10,500, a 42% gain) is perfectly par for the course, but noted that it’s totally possible we can go lower from $8,800.

The medium-term technicals support this.

Trader and CoinTelegraph contributor FilbFilb found that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses.

Also, a Bitcoin price model created using Facebook Prophet machine learning found that the leading cryptocurrency is likely to end the year at just over $12,000. What’s notable about this model is that it called the price drop to $8,000 months in advance, and forecasted a ~$7,500 price bottom for BTC.

To put a cherry on the cryptocurrency cake, Crypto Thies observed that when Bitcoin bottomed at $7,300, it bounced decisively off the 0.618 Fibonacci Retracement of the move from $3,000 to $14,000, which correlates with the two-week volume-weighted moving average. He added that summer 2019’s consolidation was marked by Bitcoin flipping major resistances into support levels, implying that a bullish reversal and subsequent continuation is likely possible in the coming weeks.

Featured Image from Shutterstock

Nick Chong , 2019-11-10 12:00:38

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