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    Home » Crypto News » Bitcoin Price Might See a Post-Halving Dump To $6750 If 2016 Miners’ Capitulation Repeats

    Bitcoin Price Might See a Post-Halving Dump To $6750 If 2016 Miners’ Capitulation Repeats

    Author: Greg Thomson

    Last Updated May 24, 2020 @ 15:45

    The gap between Bitcoin’s hashrate and its mining difficulty has led to a miners capitulation –  which could result in a major Bitcoin price dump.

    As pointed out by trader and popular YouTuber TheMoon, large discrepancies between hashrate and mining difficulty have typically resulted in a sudden departure of Bitcoin miners in the past. This, in turn, has historically been followed by a significant BTC price drop.

    Seen below is a chart analysis that points out the crossover between the moving averages of Bitcoin’s hashrate and mining difficulty.

    the_moon_bitcoin_hash_miners-min
    Source: TheMoon, YouTube.

    TheMoon points out the historical trend which saw Bitcoin regularly fall in value – for a brief period – following its block reward halvings. This can be explained by the fact that many smaller miners drop out of the mining race when their rewards are cut in half.

    This was witnessed in 2016’s block reward halving, which took place on July 9 of that year. The price of Bitcoin lost 21% in the three weeks following the halving event – from $654 to $517. If history repeats itself, then we can expect Bitcoin to drop to $6750 following a 2020 halving price of $8,550.

    bitcoin_2016_halving_price_drop
    2016 Halving, followed by the 21% price decrease. Source: CoinGecko

    Bitcoin’s mining difficulty is updated every 2,106 blocks – which is roughly every two weeks. That contrasts with its hashrate, which is updated and tracked daily. It’s between the gaps in these statistics that many of Bitcoin’s miners fall.

    According to data from Bitinfocharts, Bitcoin’s hashrate has fallen 38% since the date of the block reward halving.

    bitcoin_hashrate_post_halving
    Source: Bitinfocharts.com

    Meanwhile, data from BTC.com shows that Bitcoin’s mining difficulty was reduced by just 6% in the same period. In 11 days from now, BTC’s mining difficulty will be reduced by 6% again, possibly leaving the door open for some outpriced miners to return, but not many.

    The gap between hashrate and mining difficulty remains wide. As The Moon pointed out on May 24, the prospect of a BTC price drop remains well within the range of historical probability.

    However, while this signal is a strong one, it may not be worth acting on just yet. According to The Moon:

    “I’m not gonna sell just based on this on-chain indicator. I think that technical indicators need to be the priority. On-chain indicators can be used as a backdrop, and used in confluence with technical indicators.”

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    Read more on: Bitcoin (BTC) Price Bitcoin Halving Bitcoin Hash Rate The Moon Carl

    About The Author

    Greg Thomson View more posts by this author

    Greg is a journalist from Glasgow, Scotland who covers the cryptocurrency and blockchain beat. He has contributed to some of the foremost publications in the industry and joined CryptoPotato in 2020. Contact Greg

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