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A Chinese mining pool could be the reason that Bitcoin crashed below $30,000, and it is possible that BTC became a victim of a centrally planned price dump attempt so let’s hear more about it in today’s bitcoin news.
According to the data by CryptoQuant, the South Korea-based Blockchain analytics company, BTC miners at the Chinese mining pool F2Pool started a huge sell-off which crashed the BTC/USD exchange rate by about 20% in less than a day. The company’s CEO Ki Young-Ju listed a series of bearish alerts once BTC started plunging. The Miners’ position Index went above 2.5 reflecting more growth in the BTC units that the miners moved from their wallets. In the meantime, the data shows that F2Pool is a major BTC depositor:
“The dump might have started from BTC miners in F2Pool. 569 people deposited BTC in a single block (10 min). 78 miners deposited BTC in a single block (10 min).”
The miners typically sell their bitcoin rewards to cover the operational costs and many of them prefer to hold a portion of their holdings for speculations and to limit the crypto’s supply from entering the retail markets. This acts as an indicator to determine the BTC Short-term bias. For example, if the miners supply fewer coins to the retail amid the higher demand, the price will go up. Also, if the miners start selling more coins on the free market, it will surpass the demand and will lead to lower bids for the cryptocurrency.
The F2Pool decided to mass-dump their BTC holdings but given the huge influence over the BTC mining space, Crypto Quant deduced the mining pool’s act as the main catalyst which crashed the price to below $30,000 in a day. The BTC/USD exchange rate’s drop below was short. The traders and investors utilized the chance to buy BTC at cheaper rates and validate the long-term bullish narrative which pushed the price higher by 1000%.
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For example, the New York-based crypto investment company Grayscale Investments, bought more than $600 million worth of coins this week when the price crashed lower. This amounted to strong support levels between $30,000 and $35,000. Analysts noted that BTC has better chances of continuing the retracement thanks to the bullish divergence pattern and once an asset price moves lower, the momentum goes upward. This usually signals that the bearish traders are leading the price crash and now are gradually losing power.
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