{"id":420354,"date":"2020-04-09T16:00:04","date_gmt":"2020-04-09T16:00:04","guid":{"rendered":"https:\/\/wncen.com\/?p=420354"},"modified":"2020-04-09T14:57:14","modified_gmt":"2020-04-09T14:57:14","slug":"threes-a-crowd-final-bitcoin-miner-shakeout-points-to-an-epic-rally","status":"publish","type":"post","link":"https:\/\/wncen.com\/news\/threes-a-crowd-final-bitcoin-miner-shakeout-points-to-an-epic-rally\/","title":{"rendered":"Three\u2019s a Crowd: Final Bitcoin Miner Shakeout Points to an Epic Rally"},"content":{"rendered":"
Bitcoin<\/a> just completed a repeating pattern signaling the third, and potentially final miner capitulation event, that in during past cycles proceeded the start of a major bull run, leading to a new all-time high.<\/span><\/p>\n All financial markets are cyclical, and Bitcoin<\/a> and cryptocurrencies are no different. These assets go through periods of extended downtrends, where the market is filled with negative sentiment and falling prices, followed by uptrends when prices are rising and investors are irrationally exuberant.<\/span><\/p>\n However, one area where Bitcoin differs from other assets in the financial world like stocks, real estate, and more, is that the asset\u2019s underlying network is powered by a process called proof-of-work<\/a>.<\/span><\/p>\n Related Reading | Bitcoin Trades Below Production Cost, Miners Are Better Off Buying\u00a0<\/a><\/strong><\/em><\/p>\n Bitcoin mining involves the use of complex computers specifically designed for processing power, to solve mathematical equations that unlock a reward of Bitcoin. <\/span><\/p>\n Miners are regularly selling off their mined Bitcoin to fund operations, and the rate at which they sell the asset depends on the cost of production in relation to the current price.<\/span><\/p>\n For example, recently, the during last month\u2019s catastrophic market collapse, the price of Bitcoin<\/a> fell so far below-cost or production, miners would literally be better of buying BTC from spot exchanges<\/a> at the current rate than continue to operate expensive machinery at a loss.<\/span><\/p>\n Clearly, miners wouldn\u2019t be selling their BTC reserves at a loss after investing heavily upfront on equipment, energy, and more. Less supply from miners entering the market throws off supply and demand balance, causing prices to rise.<\/span><\/p>\n Other times, the situation gets so bad for smaller time miners, they simply turn off their machines for good and close up shop<\/a>, essentially capitulating in the process.<\/span><\/p>\n Further adding intricacy to how this impacts supply and demand, is each of Bitcoin\u2019s pre-programmed halvings. Every four years or so, the reward miners receive is slashed in half.<\/span><\/p>\n In past cycles, Bitcoin price<\/a> fluctuations have caused miners to capitulation three times per cycle, before the bull run officially begins and a new all-time high is reached.<\/span><\/p>\n <\/p>\n According to the hash ribbons<\/a>, miners have now capitulated for a third and potentially final time before it is off to the races for Bitcoin bulls once again.<\/span><\/p>\n The only minor \u2013 and miner \u2013 difference this time around, is that the third capitulation has occurred ahead of the halving.<\/span><\/p>\n Related Reading | Prelude to Bull Run: Bitcoin Hash Ribbons Signal Miner Capitulation Only Just Started\u00a0<\/a><\/strong><\/em><\/p>\n In past cycles, the third and final miner capitulation occurred post-halving, due to the sudden and sharp increase in the cost of production<\/a>.<\/span><\/p>\nPast Bitcoin Market Cycles Suggest Miners Capitulate Three Times Before Bull Run<\/h2>\n