Bitcoin Drops Below $60,000, Are Miners Suffering Heavy Losses?

Bitcoin Drops Below $60,000, Are Miners Suffering Heavy Losses?Bitcoin has been on a downward trajectory since reaching a 2-month high of $66,500 on September 27th, experiencing a cumulative decline of approximately 7% over the last three trading days. Starting late on October 1st, Bitcoin plunged from $63,800 to a low of $60,128

Bitcoin Drops Below $60,000, Are Miners Suffering Heavy Losses?

Bitcoin has been on a downward trajectory since reaching a 2-month high of $66,500 on September 27th, experiencing a cumulative decline of approximately 7% over the last three trading days. Starting late on October 1st, Bitcoin plunged from $63,800 to a low of $60,128.1, with intraday losses reaching over 4% on October 2nd. As of press time, the losses have narrowed slightly, with the latest trading price at $61,259.7, representing a 2.55% decline.

Data indicates that over the past 24 hours, the number of liquidations across the entire virtual currency network has surged to 157,000, with liquidation amounts reaching $510 million (approximately 3.6 billion yuan). Bitcoin's continuous decline has brought an end to the rebound rally in September, dampening investor optimism for what had been historically the most profitable month in cryptocurrency. Statistics show that since 2013, Bitcoin has only closed October with losses on two occasions.

"After the strong rally since early September, technical indicators are now signaling Bitcoin's facing headwinds," said Brian Strugatz, head of spot trading at FalconX, a major cryptocurrency brokerage. "The Stochastic RSI is overbought, and a significant number of Bitcoin holders on exchanges are starting to sell."

Market consensus points to weakening expectations for Fed rate cuts and cooling ETF demand as the primary drivers behind this recent Bitcoin downturn. While net inflows into Bitcoin spot ETFs are becoming a key factor influencing the trajectory of Bitcoin and the overall virtual market, prevailing market sentiment anticipates that this wave of downward volatility will persist.

Zhao Wei, a senior researcher at OKX Research, stated that the market is currently awaiting fresh news and signals to determine the next move. Chris Newhouse, head of research at Cumberland Labs, commented, "After rallying to the $65,000 resistance level, I observed weakening demand for spot Bitcoin, with many traders realizing profits."

Since Bitcoin's halving event in April, the earnings of Bitcoin miners have experienced a substantial decline. It's understood that Bitcoin's daily output varied prior to the halving, but consistently revolved around the block reward system, averaging 6.25 Bitcoin produced every 10 minutes. Based on the previous block rewards, this translates to approximately 900 Bitcoin generated daily. However, following the halving event, this figure dropped to roughly 450 Bitcoin per day.

Currently, Bitcoin's price is nearly on par with its pre-halving price (between $60,000 and $65,000 per coin), yet miners' output has been halved. Calculations reveal that if miners sell Bitcoin at $60,000 per coin, the entire mining industry would suffer a loss of nearly $10 billion in revenue over the year following the halving.

While Bitcoin's price has experienced some downward fluctuations in the recent wave of volatility, it remains aligned with its pre-halving price, representing a significant blow to miners. The sharp decline in miner earnings after the halving has squeezed their profit margins, which could further impact the overall computing power of the Bitcoin network, ultimately affecting Bitcoin's security.

It's crucial to note that Bitcoin's price volatility has always been one of its defining characteristics. Both upward and downward movements can trigger substantial fluctuations in the short term. Hence, investors engaging in Bitcoin investments should remain rational, exercise caution, and implement robust risk management strategies.

Disclaimer: The content and data in this article are for informational purposes only and do not constitute investment advice. Please verify before using. Act at your own risk.