In recent months, Bitcoin price has slowly descended from the 2019 high of $13,880 to the current levels of just above $8,130. This plunge is beginning to put weak miners out of business. In the past week, Bitcoin’s mining difficulty plunged 7% abruptly. That drop enabled miners to easily solve algorithms and mine blocks.
That development means that the weak miners and those that encounter high operating costs are constantly going out of business. The new move does not go well with the bitcoin HODLers because capitulating miners usher in a major bitcoin dump.
On the bright side, the expected selloff will be nothing more than a shakeout. Therefore, a bitcoin network featuring highly-efficient miners will probably curb the number of sellers after the May 2020 halving.
Bitcoin Turns Bearish Before Halving
Bitcoin halving ranks among the most bullish events that hit the cryptocurrency space. That is the time when the block rewards are cut in half. During the first bitcoin halving event in 2012, the block rewards were cut from 50 BTC to 25BTC. Just a month later, the Bitcoin price exploded by more than 7,976%.
The second halving took place in July 2016 with block rewards plummeting from 25 BTC to 12.5 BTC. Just over a year later, the token’s price surged by 2,902%. The last two halvings have resulted in an increase in Bitcoin value by reducing the number of BTC that enter circulation. Thus, the third halving is expected to have the same effect.
Nonetheless, some analysts think that this time around Bitcoin is heading into the halving without any significant bullish steam. They allege that Bitcoin has never acted this way.
Is This Bitcoin Plunge a Shakeout?
With the recent downturn in mining difficulty, it will not come as a surprise if Bitcoin is dumped. Any major drop in price would suggest that the weak miners are selling to reduce their losses. In turn, the selloff may result in the retail investors relinquishing their holdings.
If another bloodbath arises, it will be…