The behavior of miners is cyclical and is directly related to the price of Bitcoin. So, upon reachinghistorical maximum they increaseoffer to fix profits and cover operating costs. When the price corrects while maintaining the complexity of the calculation, the profitability of mining drops dramatically, forcing miners to accumulate coins in anticipation of better days.
Bitcoin Price Declines From November Highsalready by 40%, while the daily profitability of one of the best Antminer S19j pro installations worth $11,000 fell from $25 to $15, and the average daily profitability per terahesh fell from 45 cents to 22 cents.
Image Source: Cryptocurrency ExchangeStormGain
Major mining companies are ramping upproduction capacity by attracting investment capital. They will not resort to turning off installations even when they reach negative returns. Because of this, the complexity of the calculations correlates worse and worse with the price. So, it has risen the last three times, despite the current 40% correction of Bitcoin. And, probably, in 10 days it will grow by another 0.8%.
Image Source:btc.com
In order not to work at a loss, mostminers resort to accumulating bitcoin. According to Glassnode, they became especially active in saving coins after the price dropped below $45,000. The volume of miners’ reserves reached 1.9 million BTC, or 10% of the total supply. If we exclude lost coins, then the figure approaches 15%.
Image Source:glassnode.com
This time, the behavior of the miners is consistent with the general sentiment: after the November sale, the market is dominated by the accumulation of coins.
Image Source:glassnode.com
Supply reduction in the market will support Bitcoin. Also, the normalization of the situation in Kazakhstan, which is the second largest player in the mining market, will have a positive impact.
Analytical group StormGain
(platform for trading, exchanging and storing cryptocurrency)
