Previously, U.Today covered that Bitcoin mining profitability is at all-time lows after the digital gold lost ground around $20,000 and dropped far below the 2017 all-time high and is now struggling to get back above the psychological support.
Besides the low Bitcoin price, the chief difficulty of the network and rising electricity costs all over the world are enormously pressuring Bitcoin and crypto miners. The hashprice is currently at its October 2020 lows.
Lower Bitcoin price, higher hash/difficulty, and higher energy costs have put serious pressure on miners margins. Hashprice is now its lowest since October 2020.— Will Clemente (@WClementeIII) June 18, 2022
Hash ribbons have crossed (bot. left), indicating machines unplugging + Miners sending BTC to exchanges. (bot. right) pic.twitter.com/x7J7pYTZ9W
Many metrics suggest that miners are turning off mining rigs on a massive scale to minimize their losses because of the low or almost nonexistent margin. In addition to mining rigs being turned off, miners' addresses' activity suggests that they are massively selling their holdings to cover a portion of the loss caused by the unexpectedly negative market performance.
Unfortunately, the majority of GPUs and mining devices are no longer profitable, which may lead to the exponential drop in the hashrate in the upcoming weeks as more big farms decide to go offline to avoid massive losses.
The average breakeven price for a mining rig is currently sitting at approximately $21,000, which had already been broken by BTC as it struggles to gain a foothold even above $20,000.
For miners to be able to comfortably mine BTC and gain some decent profit from it, the orange coin should reach at least $30,000. The brighest part of the story is that with the rapidly decreasing hashrate, we will see a respectable drop in the difficulty of the network.
In hindsight, the massive selling pressure incoming from miners may become a capitulation point for the market bleeding for the last month.