Bitcoin is the purest and most battle-tested form of crypto money, and we must focus on its price action to divine whether the market's bottom has occured - cryptohayes cryptocurrency
But, let’s look at some charts to examine how these waves of crypto credit crunches affected the miners and what they did in response.As we can see, miners have been net selling a large amount of Bitcoin since the first credit crunch in the summer. They must do this in an attempt to stay current on their big fiat debt loads.
In general, the hashrate has trended higher over time. But, there are periods where the 30-day growth is negative. The hashrate declined right after the summer meltdown, and then most recently plunged due to the FTX / Alameda fallout. Again, this confirms our theory that miners will downsize operations when there is no more credit available to fund their electricity bills.
Now that CELs have collections of mining rigs that they can’t easily sell and can’t operate, they can try to sell them and recover some funds – but it’s going to be single digit cents on the dollar, given that new machines are trading 80% off from a year ago. They can’t operate a mining farm because they lack a data centre with cheap electricity. And that’s why the hashrate just disappears – because of an inability to turn the machines back on.
I believe that the forced selling of Bitcoin by CELs and miners is over. If you had to sell, you would have already done so. There is no reason why you would hold on if you had an urgent need for fiat to remain a going concern. Given that almost every major CEL has either ceased withdrawals or gone bankrupt, there are no more miner loans or collateral to be liquidated.These punters are your run-of-the-mill traders.
The timing and magnitude of the reduction of the OI leads me to believe that most of the over-leveraged long positions have been extinguished. What remains are traders using derivatives as a hedge, and those using very low leverage. This gives us a bedrock to move higher. I have a few super-powered assets such as GMX and LOOKS in my portfolio. This is not the essay where I go into why I will be opportunistically selling my T-bills and purchasing these during the upcoming months of the hopefully sideways bear market.
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