Aaryamann Shrivastava
FXStreet
- Bitcoin price has failed to recover from the more than 11% crash, resulting in the cryptocurrency trading at $25,899.
- Bitcoin mining difficulty is at its all-time high, which is a good sign for the network but not for the miners.
- To adjust the losses borne from BTC crashing, miners are shedding from their reserve, selling $72 million worth of BTC in a day.
Bitcoin price crash brought losses to everyone - investors and traders and did not even spare miners. The people who have been validating the blocks on the network bore the brunt of the market as they faced unprecedented losses, forcing them to move to sell for a long time.
Bitcoin price crash causes distress to miners
Bitcoin price had been hovering around $30,000 before it crashed this month, and at the time of writing, the cryptocurrency could be seen under the $26,000 mark. The biggest cryptocurrency in the world has already failed all its attempts to chart a recovery and is presently declining further below the lows of the August crash.
BTC/USD 1-day chart
Following the crash, the Bitcoin mining difficulty hit an all-time high, which, while a good thing for the network, is actually concerning for the miners. An increase in mining difficulty is usually a sign of growing competition as more miners join the network in a bid to make profits. This bolsters the security of the network, keeping it safe from a 51% attack (an attack where one miner(s) controls 51% of the blockchain validation, killing decentralization).
Bitcoin mining difficulty
This increase in competition, combined with an increase in block validation difficulty as well as the low price of BTC, thanks to the recent crash, dropped a bomb of losses on the miners. Consequently, these miners had to sell the BTC they held in their reserves. The miner reserve currently holds about 1.843 million BTC, which 24 hours ago was around 1.846 million BTC.
In the span of a day, Bitcoin miners sold about 2,803 BTC worth approximately $72.8 million, the highest to cover the losses they have been experiencing. Since operation costs (costs amounting to constantly running mining rigs) are consistently increasing, the miners are forced to sell their holdings in order to pay their bills.
Bitcoin miner outflows
These losses are expected to be minimized going forward, provided Bitcoin price bounces back to reclaim $26,430 as a support floor. However, if the bearishness does not subside, BTC could slide to June lows of $25,126.
Bitcoin, altcoins, stablecoins FAQs
What is Bitcoin?
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
What are altcoins?
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
What are stablecoins?
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
What is Bitcoin Dominance?
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Whale grabs 16,000 ETH as Ethereum Foundation vows support for L1, RWA and stablecoins
Ethereum Foundation's Co-Executive Director Tomasz K. Stańczak highlights simplified roadmap scaling blobs and improving L1 performance. Ethereum whale scoops 16,000 ETH, emphasizing growing interest in the token as the price recovers.
Bitcoin retests key resistance at $85K, breakout to $90K or rejection to $78K?
Bitcoin (BTC) price edges higher and approaches its key resistance at $85,000 on Monday, with a breakout indicating a bullish trend ahead. Metaplanet announced Monday that it purchased an additional 319 BTC, bringing its total holdings to 4,525 BTC.
XRP price teases breakout, bulls defend $2 support
Ripple (XRP) price grinds higher and trades at $2.15 during the early European session on Monday. The token sustained a bullish outlook throughout the weekend supported by bullish sentiment from the 90-day tariff suspension in the United States.
Senator Elizabeth Warren launches fresh offensive on crypto
Senators Elizabeth Warren, Mazie K. Hirono, and Dick Durbin want the DoJ’s decision to terminate crypto investigations reversed. The Senators raise concerns over the DoJ’s shift in priorities, terming it a “grave mistake.”
Bitcoin Weekly Forecast: Market uncertainty lingers, Trump’s 90-day tariff pause sparks modest recovery
Bitcoin (BTC) price extends recovery to around $82,500 on Friday after dumping to a new year-to-date low of $74,508 to start the week. Market uncertainty remains high, leading to a massive shakeout, with total liquidations hitting $2.18 billion across crypto markets.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.