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During the weekend, the price of Bitcoin bleeds heavily and, as usual, slows the pace of the entire crypto-assets market. However, the reason could be the poor outage and sharp drop in the hash rate.
Analyst and charting expert Willy Woo pointed out that the largest drop in the mining hash rate in a day since November 2017 was on April 17th. He added that the hash rate on the network has basically dropped in half, creating chaos that causes BTC price to collapse.
Bitinfocharts also saw a slump: the index’s average hash rate fell from almost 157.58 EH/s to 105.43 EH/s, the lowest level since December 2020.
Woo attributed the hash’s collapse to the power outage in Xinjiang Province, which is one of the main areas for bitcoin mining. He added that this was known before the BTC price collapsed on the 18th, citing local news on September 15th.
In light of this news, 9,000 BTC was sent to Binance on April 16, adding:
“I’d note that Binance serves volume from Asia more than the West. It’s likely this was sent in from a whale with closer knowledge to happenings in China.”
Woo added that the combined selling pressure of these two events was enough to cause the price to fall below the $59,000 clearing level, triggering a series of automatic sell-offs when the stop loss was triggered.
Strong buyers have been buying into the decline since Sunday’s low point and have since rebounded by around $4,000.
According to Tradingview, Bitcoin fell 12.5% in a matter of hours over the weekend, from $61,450 on late Saturday to $53,750 the next day.
On Monday morning, Asian trading saw a revival in wealth, but analysts are investigating what caused the cascade that led to the $10 billion liquidations.
Some people started rumours that the U.S. Treasury Department accused several financial organizations of using cryptocurrency to launder money that may have caused the collapse. Others are looking for answers in the chain, it seems that the hash rate has also dropped sharply than the market.
As of press time, Bitcoin has rebounded to $57,500 in Asian transactions, but corrected slightly a few hours later, leaving the asset transaction price slightly below $57,000.
Basically, the market is still very strong and this light chain phenomenon is not enough to get the bears’ attention. Since the decline, total market value has dropped from more than $10 billion to more than $2 trillion.