After further mining bans in China, the Bitcoin course corrected again. But for PlanB this is no reason to be bearish. He sees the price at at least $ 135,000 this year.
The mining hash rate is in free fall. The Chinese government is turning words into deeds and is grinding more and more miners. As we have already reported (also here), China is now also cutting off the juice from mining farms that get their electricity from renewable energy. According to The block Farms in Xinjiang, Qinghai and Yunnan are affected – the first videos of mining operators disconnecting their devices are already circulating on Twitter. It is not surprising that the hash rate has to take a damper.
With just over 100 exahashes per second (EH / S), the accumulated computing power in the network is as low as it was last in October 2020.
It remains to be seen whether some of the farm operators concerned seek their salvation overseas. However, there are corresponding offers, for example from Miami. Mayor Suarez himself is busy promoting the drums and wants willing entrepreneurs to farm with cheap nuclear energy.
Of course, the drop in the mining hash rate among investors does not exactly create confidence in the network. Since the new restrictions on mining farms became known, Bitcoin has also made significant corrections. On a day-to-day basis, a minus of 3.6 percent was posted, and on a weekly perspective, even minus 11 percent.
As of press time, Bitcoin is trading at $ 33,000. The overall market also has to accept a damper: at 1.47 trillion US dollars, the combined market capitalization of all cryptocurrencies is 4.6 percent below the previous day’s level. After all: BTC has not yet fully arrived in bear mode. Finally, BTC is still trading above the premature bottom at $ 31,600 as of June 8th. As long as this level is not fallen below, traders do not have to throw the gun in the grain.
The mining FUD from China should also only damage the course for a short time. After all, Bitcoin is absolutely safe with over 100 EH / S – attacks such as 51 percent attacks are absolutely impossible.
Bulls remain bullish
How could it be any different; Long-standing Bitcoin bulls don’t bury their heads in the sand even when making corrections like this one. For example, Perma-Bulle PlanB tweeted an update on the stock-to-flow model – and there can be no talk of a bear mood.
In his view, the model is intact, which in the worst case implies that BTC is above $ 135,000 in December – so far the worst case scenario. In the best-case scenario, the price of cryptocurrency No. 1 will be over 450,000 US dollars this year. A price increase of 1,223 percent in six months should make even the most daring Bitcoin bulls smile tiredly.
In fact, even with this correction, the model is still statistically significant. It is at the lower end of the statistically tolerable fluctuation range. If the price no longer drops significantly from here, a recovery in the crypto market can be expected soon.