Bitcoin Drops Below $60,000, 166,000 Liquidated, Miner Profits Plunge to New Lows

Bitcoin Drops Below $60,000, 166,000 Liquidated, Miner Profits Plunge to New LowsMarket data shows that in the past 24 hours, the number of liquidations across the cryptocurrency network has risen to 166,000, with liquidation amounts reaching $558 million, marking a new high since August 5th. Bitcoin has been on a downward trend since hitting a two-month high of $66,500 on September 27th, losing about 7% in the past three trading days

Bitcoin Drops Below $60,000, 166,000 Liquidated, Miner Profits Plunge to New Lows

Market data shows that in the past 24 hours, the number of liquidations across the cryptocurrency network has risen to 166,000, with liquidation amounts reaching $558 million, marking a new high since August 5th. Bitcoin has been on a downward trend since hitting a two-month high of $66,500 on September 27th, losing about 7% in the past three trading days. Starting from the evening of October 1st, Bitcoin plummeted from $63,800 to a low of $60,128.1. As of press time, the decline has narrowed slightly, with the latest trading price at $61,090.8, representing a daily drop of over 4%.

On the news front, on the evening of October 1st, Iran launched a missile attack on Israel, triggering risk aversion in the market, causing a decline in risky assets. Other tokens besides Bitcoin were also affected, with Ethereum dropping over 6% on the day and Dogecoin falling nearly 10%.

Bitcoin's continuous decline brought an end to the rebound in September, dampening investor optimism about entering the historically best-performing month for cryptocurrencies. According to statistics, since 2013, Bitcoin has closed lower in October only twice.

"After the strong rally since the beginning of September, technical indicators now suggest Bitcoin is facing headwinds," said Brian Strugatz, head of spot trading at major cryptocurrency brokerage FalconX. "The stochastic RSI is in overbought territory, and a large number of Bitcoin holders on exchanges are starting to sell." Chris Neuhouse, research director at Cumberland Labs, also stated: "After rising to the $65,000 resistance level, I observed dwindling demand for spot Bitcoin, and many traders are taking profits."

Miner Profitability Indicators Plunge to Recent Lows

Since the Bitcoin halving in April, Bitcoin miners' revenue has seen a significant decline. It's worth noting that the daily production of Bitcoin varied before the halving, but it revolved around the block reward system, averaging 6.25 Bitcoin every 10 minutes. Based on the previous block reward, this equates to approximately 900 Bitcoin produced daily. However, after the halving event, this number reduced to about 450 Bitcoin per day.

Currently, the price of Bitcoin is almost at the same level as before the halving (around $60,000 to $65,000 per Bitcoin), yet miners' output has been halved. Calculations show that if miners sell their Bitcoin at $60,000 per coin, the entire mining industry will lose nearly $10 billion in revenue in the year following the halving.

In their latest report on October 1st, JPMorgan analysts, Reginald L. Smith and Charles Peirce, wrote that the daily block reward gross profit in September declined by 6% month-over-month, reaching "the lowest point in recent history." The report stated that despite a moderate increase in the average price of Bitcoin, mining revenue and gross profits continued to decline for the third consecutive month.

Currently, the total market capitalization of the 14 major mining companies listed in the US exceeds $20 billion. The industry has grown exponentially in recent years as the price of Bitcoin soared. However, due to the halving and increased competition from the influx of large US operators, miners' profits are shrinking. Data shows that the stock prices of Mara Holdings and Riot Platforms, two of the largest American mining companies, have dropped by 34% and 54% respectively this year.

With the ongoing price volatility of Bitcoin, both investors and miners are facing immense pressure. The future price trajectory of Bitcoin will depend on the market's reaction to the Middle East conflict, as well as how miners respond to the challenge of dwindling profits.

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