It’s now been five days that the price of bitcoin is keeping above $6,000, we managed to even spike to nearly $7,000 briefly.
For the most part, BTC is staying above $6,600, trying to find a ground. However, if Bitcoin jumps above $7k, trader Jonny Moe sees it going to $7,600 as “there's not much but air until 7.6.”
Meanwhile, altcoins are enjoying a much higher percentage of gains with XRP emerging as today’s winner among the top cryptos, up over 9% followed by BNB’s 6.18% gains.
Also, while Bitcoin has wiped out all the gains made in 2020, the likes of BSV (80%), Tezos (30%), Link (22%), Dash (58%), HBAR (147%), Kyber Network (157%) among others are still up considerably in a year-to-date basis.
V-bottom recovery & a week of capitulation just don't happen
Despite positive movement, things aren’t all good for the world's leading cryptocurrency. As we reported, some analysts are of the view that $3,850 might not be the bottom of this cycle and we could very well make our way back below $4,000 and $3,000.
The Bitcoin whale on crypto exchange Bitfinex, Joe 007 is also of the same opinion as he explained that capitulation just doesn't complete within a day with a V bottom recovery. He said sardonically,
“V-bottom recovery to the tune of 3K point up within a week of “capitulation” would be some unprecedented new price pattern for Bitcoin. “But this time it's different!” – oh, yes, of course. How silly of me to forget….”
The reason behind his bearish sentiments are the overleveraged miners that he previously said will be “unbelievably f—cked come halving,” as the cost of mining one bitcoin is currently more than 8% higher than the price of Bitcoin.
Miners selling more than mining & it had just started
Overleveraged miners getting unprofitable means millions worth of BTC would be liquidated, which has already started to take place.
On March 25th, Charlie Morris of ByteTree.com noted that miners have been selling more than they have been mining. He said,
“Miners today sold 2,788 against 1,588 mined. Slamming the market, yet the market takes it.”
Bitcoin miners are selling because they are in need of cash after the decline in BTC price rendered them unprofitable. The miners have already started shutting down their rigs as reflected in the 45% drop in the network hash rate in March.
However, the fact that difficulty adjustment saw its second-biggest decline means it has become easier to find a new block. As such, the hash rate has started to bounce back, jumping 10x from the lowest point on March 25th. This means miners are returning to the network indicating there is no capitulation or lack of confidence on miners’ part.
So, no way long on Bitcoin, yet
Despite the possible development, the Bitfinex whale believes this “delayed supply” is just the very first of the many batches to come to the market because these miners accumulated Bitcoin in anticipation of “mad gainz” from the upcoming reward halving in May 2020.
Come halving, in less than two months, the block rewards will be cut down in half from current 12.5 BTC to 6.25 bitcoins. The day after the market went through a violent sell-off, Joe007 wrote,
“Overleveraged miners still overleveraged and doubly fucked by coming halving. And L/S margin ratio still doesn't look too good TBH. I may have closed my shorts but it in no way means I'm ready to go all long, especially with leverage.”
Adding to his bleak short-term view, the bitcoin whale said instead of the supply reduction shock expected by everyone, he is “waiting for the delayed supply reentry shock to unfold.”