Did a massive Chinese power outage cause Bitcoin’s crash down to $50k?
Wu said reports of power outages came in late last week. The power cuts were intended to facilitate safety checks following a recent flooding accident at a local coal mine in which 21 miners were temporarily trapped underground after power and communications were cut off.
According to the Cambridge Bitcoin Energy Consumption Index, or BECI, Xinjiang accounts for nearly a quarter of global hashish consumption.
The analyst notes that yesterday saw the largest daily drop in the total number of hashes on the Bitcoin network since November 2017, from 172 million teras per second, or TH/s, to less than 154 million. TN/s, according to Ycharts.
Willy Woo, a popular cryptocurrency market analyst, attributes the sharp drop in the hash rate to the April 18. due to a power outage in the Xinjiang region of China.
Bitcoin Hash Rate: Schedules
Wu shows the 9000 BTC that were sold on the 16th. April were transferred to Binance, suggesting the funds were likely sent by a whale with intimate knowledge of events in China.
Combined with large selling volumes in the quarterly futures markets, this bearish momentum resulted in $4.9 billion in bitcoin liquidations and $4.4 billion in additional margin calls in the altcoin markets.
Not everyone agrees with Wu’s analysis, however. Adam Cochran, partner at Cinneanhaim Ventures, believes the idea that last night’s power outage in China’s mining region resulted in a $BTC spike is absolute nonsense.
You may have seen charts claiming a correlation between mining hashing and the drop in the price of bitcoin.
I saw all kinds of words scattered throughout this chart, including cause and effect and correlations from a lot of people who can’t count. pic.twitter.com/Gfog3Sk8Wo
– Adam Cochran (@adamscochran) April 18, 2021
Wu noted that long-term whales, which rarely sell, generally buy lower, adding that the lower $50,000 range represents the largest group of price openings since BTC was below $10k.
The validation of BTC as a trillion-dollar asset is extremely strong, he said, adding that 13.5 percent of total BTC stock has gone up in the blockchain, while bitcoin’s capitalization has surpassed $1 trillion.
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