Bitcoin miners have not been able to escape the impact of the FTX crash, as their profitability has decreased. That event has also prevented the price of BTC from breaking out of its crucial support region.
The collapse of FTX has harmed the crypto market, as users have lost confidence by not feeling protected.
While several investors lost billions of US dollars, miners had to leave their businesses. The profitability of miners fell considerably due to the collapse of the crypto market.
The current crypto winter might have a prolonged effect on the market, lasting from several months to one year.
The Profitability of BTC Mining Falls as the Crypto Winter Worsens
Bitcoin (BTC) miners seem to be in trouble as they have not been able to escape the impact of the FTX crash.
Since Bitcoin is trading at around USD 16,000, the potential and profitability of miners have declined.
The profit margins of Bitcoin have bottomed out as their holdings have declined. They reached a low of 1.826 million BTC, equivalent to USD 30.6 billion.
According to Glassnode, the change in miner net position dropped to 10,972 BTC, the lowest since January.
The analytics firm also noted that the long-term holder supply decreased by 61,500 BTC, a significant event.
A sudden drop in the BTC hash rate caused miners to liquidate their holdings at around 9.5%.
Meanwhile, CryptoQuant claimed that miners traded 1,300 BTC on the same day FTX crashed. According to the price chart, that event has led BTC miners to generate selling pressure.
The Miner Position Index (MPI) has also reached a low, suggesting significant momentum in BTC outflows by miners.
The Price of Bitcoin Might Recover in the Long Term
The collapse of FTX has not allowed the crypto market to form green candlesticks. The price of BTC has remained trapped close to its crucial support region without showing signs of a possible reversal.
The value of BTC previously had monthly support at USD 18,000 but dropped to the bottom line on breaking below that level.
However, BTC struggled to break its immediate resistance level of USD 17,000 when Binance introduced a reserve fund. After facing rejection at that level, it could not hold its price for long.
The price of Bitcoin is in a recovery phase at USD 16,000 as it forms a support level. The cryptocurrency is trading at around USD 16,500, above its 100-hour SMA.
There would be a slightly bullish hope for investors if Bitcoin broke above its immediate resistance level of USD 18,000. BTC could thus trade near its 100-day EMA at the USD 20,500 trend line.
The RSI-14 remains in an oversold region of the 36 level, suggesting a further bearish trend.
The price of BTC might drop below its lower limit of USD 15,500, a crucial support level for bearish momentum. If that happened, it might reach a lower range between USD 13,000 and USD14,000 in the short term.
By Alexander Salazar
