China electric issue causes Bitcoin to pull back

ultrloa

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Quote from: Velkro on May 25, 2020, 12:09:07 PM

Quote from: Oasisman on May 24, 2020, 05:34:00 AM

Now, my question is, does the Sichuan electric issue causes Bitcoin to pull back from almost hitting the $10,000 level?

No, it doesnt affect it at all.
Problem of miners in one world area can cause increase miners gain in other areas, thats it, no further effect anywhere else.

Price of Bitcoin is hard to predict because there are hundreds of different things that affect price, you cant even know them all before you can use them to try to predict price by them.

It somehow has an effect but not totally big since if the transaction fee is so high then maybe the other player will shift to the other crypto who will deliver them a good speed and less fee, but actually in over all category this doesn't effect on the price since there's nothing we can do with mining. And I think the one can make the price to pull back is when the traders will go away from the bitcoin.

omone1

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While I don't immediately understand the correlation between hash-rate and price movement, but I am certain the bitcoin halving psychology caused the price downward trend together with the FUD of a possibility of Satoshi himself moving some bitcoin from 2009 wallet which off course is another lie to scare traders.

Velkro

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Quote from: Oasisman on May 24, 2020, 05:34:00 AM

Now, my question is, does the Sichuan electric issue causes Bitcoin to pull back from almost hitting the $10,000 level?

No, it doesnt affect it at all.
Problem of miners in one world area can cause increase miners gain in other areas, thats it, no further effect anywhere else.

Price of Bitcoin is hard to predict because there are hundreds of different things that affect price, you cant even know them all before you can use them to try to predict price by them.

DarkDays

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Why would reduced mining activity cause Bitcoin to pull back?

Bitcoin hash rate has been on the decline since May 12 (halving day). There is no evidence to suggest that the recent dip from high 9's to around $9k has anything to do with miners.

Correlation doesn't equal causation. It's irritating when people try to link practically any trivial event to the price action of Bitcoin.

The vast majority of miners are sellers, not buyers. Reduced mining activity should actually lead to reduce selling volume. Doubt the difference would be consequential though.

davis196

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I don't think that the BTC mining and hashrate has anything to do with the Bitcoin price volatility.
If the dry season in China continues,miners are going to face some long term difficulties.I wouldn't be surprised if the Chinese authorities ban the crypto mining farms temporarily,in order to reduce the electricity consumption.Anyway,the mining difficulty will get reduced,so the blockchain will continue to work properly.
The Bitcoin price have dropped because of other reasons.We don't have any clear info about the reasons behind the price drop yet.

pooya87

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the only time that hashrate can influence bitcoin price in a meaningful manner is if it dropped significantly enough to cause concerns about bitcoin's security. for example if it was cut in (at least) half, that is >50% of miners shutting down. otherwise the small fluctuations are simply ignoreable specially when you consider the fact that we have absolutely no way of accurately measuring hashrate in short term.
obviously some small number of miners have indeed left after the halving but when you check the long term hashrate values (eg. monthly) you can see that there isn't really that much difference.

The Cryptovator

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To be honest I can't found any correlation between mining hash rate and Bitcoin price (I would be wrong as well). I strongly believe most of bitcoin investors do not care about hash rate. The question about price pull back then I will say it's just normal behaviour of bitcoin trend. Also there was no notable downtrend as well if you see current volatility. The simple reason is of current pull back, btc going to correction zone after Halving. Mostly article about hash rate likely to create FUD in my opinion and whales could accumulate again.

salamat700

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I think that with less mining activities or participants, there can be fewer Bitcoin mined and therefore less Bitcoin that can be sold on the market. This should have a good reason for Bitcoin price to stay higher and not go lower. Anyway, this is just my noob point of view plus we know that the Bitcoin marketplace is not really acting things based on rational thinking (a feature shared by any other market for that matter). On the other hand, this dip can be a good opportunity to buy more Bitcoin as days from now price will be nearing the $10,000 level again, resulting into fast and sure profits.

franky1

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first of all the mining farms purchase large allotments of electric in long term contracts. mining farms are not affected by the daily whims of price and domestic electricity stuff.

its the small hobby miners that actually react with emotion and pool hop/coin hop to whatever coin is most profitable to mine at any time.

in short the ratio of hobby:farm is now more in farms favour because less hobbiests are mining

mining is still above the 80exa long term min.

the 'peak' hashrate should never be seen as the norm day to day expectation
the 'peak' price should never be seen as the norm day to day expectation.

so stop thinking the hashrate should be 120k all the time
so stop thinking the price should be 10k all the time

even 8 years ago there was a term which has and should remain in peoples minds
'volatile'
expect swings in price. expect swings in hashrate

hatshepsut93

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Do you think that Bitcoin holders and traders closely watch Bitcoin's hashpower and base their trades on it? This was never the case in the past, we've seen hashpower going up or down by a lot without the same change in price.

People in crypto have a strong tendency to grasp at straws while trying to explain the price movements, which is even more stupid when it's applied to such insignificant movements like this one. Bitcoin losing/gaining 3-5% is business as usual.

stompix

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Quote from: Oasisman on May 24, 2020, 05:34:00 AM

It was also reported that Sichuan has been contributing not more than 10% of China's Bitcoin hash power.
Source : https://www.google.com/amp/s/www.financemagnates.com/cryptocurrency/news/local-chinese-authority-seeks-to-curb-bitcoin-mining/amp/

I can find you 300 articles each quoting Sichuan with anything from 10% to 107%.

Here is 54%:
https://thenextweb.com/hardfork/2019/12/11/bitcoin-cryptocurrency-mining-hash-rate-china-renewable-energy-blockchain/

Here is 70%:
https://news.bitcoin.com/chinese-miners-flock-to-sichuan-for-cheap-electricity-during-the-wet-season/

Everybody is just throwing figures around with no real basis.

Quote from: stompix on May 16, 2020, 05:33:34 AM

The first block of this epoch:
628992 Mined on 2020-05-05 04:00
https://blockchair.com/bitcoin/block/628992

The halving block:
630000 Mined on 2020-05-11 19:23
https://blockchair.com/bitcoin/block/630000

The last block mined:
630576 Mined on 2020-05-16 09:11
https://blockchair.com/bitcoin/block/630576

So, before the halving we were doing for 6 days:
1008 blocks in 6 days, 15 hours, 23 minutes 9383 minutes 9.3 mins/b

After:
576 blocks 4 days, 13 hours, 48 minutes 6588 11.43mins/b

Just before the halving the difficulty estimator was:

Quote

... between +4.3774% and +6.0926%

now is

Quote

between -1.8704% and -1.7868%

Quote from: Oasisman on May 24, 2020, 05:34:00 AM

What's the correlation between mining hash rate and Bitcoin price?

Price dictates hashrate, simple as that.

Quote from: o_e_l_e_o on May 24, 2020, 06:01:54 AM

First of all, the hashrate has never been higher. The recent drop due to the halving plus the events you have described have only taken us back to the same levels we were at at the end of last year, and remains higher than everything from September last year back to the genesis block. When we were pushing $14k back in June, the hashrate was only around 63% of what it is now. When we peaked at $20k in 2017, the hashrate was approximately 15% of what it is now. There is no real correlation between hashrate and price.

Unfortunately, you're missing something, just as the world was missing something, ... mining gear
An s9 went for 3000$ (twice more than at launch!!! and we were already 2 years later and we're talking about used gear)
Simply there was no way for the hash rate to grow, there were no machines left, there was nobody capable of producing them, nobody could produce 20 times more miners that had been produced in history in a matter of less than a year. That's why the hash rate couldn't keep up.

BrewMaster

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Quote from: Oasisman on May 24, 2020, 05:34:00 AM

hash rate drops 33% EH/s,

no matter how i calculate it, i can not get 33%. the "peak" of the hashrate in the past month (according to the same site with the article) was 120 and it is currently 92. even though both numbers are unreliable it still gives us 23% drop!
https://charts.bitcoin.com/btc/chart/hash-rate#5moc

by the way 92 EHS is the same hashrate we had 2 months ago!!!

Quote

Now, my question is, does the Sichuan electric issue causes Bitcoin to pull back from almost hitting the $10,000 level?

not at all. we didn't have any kind of big drops to be concerning or in coordination with any change in hashrate. we had a small drop which was partly because $10k is a psychological barrier and wasn't broken and partly because of the Satoshi related FUD.

Quote

What's the correlation between mining hash rate and Bitcoin price?

when price goes up, miners see the increased profit so they increase their hashrate. when price goes down they see the decreased profit and if they don't see any recovery anytime soon (since bitcoin is pretty volatile) they decrease their hashrate (eg. shut down their miners).

DoublerHunter

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^ Mining hash rate may not have a direct effect right now but if the electric issue in Sichuan will not be resolve as soon as possible then we will all experience the impact of this in bitcoins' price. Halving is still the main reason for this hash rate for there are miners who temporarily suspend their mining and that is base on what had happened on the previous halving and the electric issue in Sichuan still has no concrete evidence yet to prove that it is the main reason for a lower hash rate. Since the Sichuan issue has no direct effect on the hash rate than for me it is not the reason as well for the pullback in bitcoins' price.

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Quote from: Oasisman on May 24, 2020, 05:34:00 AM

Now, my question is, does the Sichuan electric issue causes Bitcoin to pull back from almost hitting the $10,000 level?
I'd be happy to read all your comments about this.

Edit (As I found a more interesting topic to be discussed) :

What's the correlation between mining hash rate and Bitcoin price?

I don't think the price and mining hash rate are connected directly. Only, like ranochigo pointed out, through news and people reacting to the news. And in this particular case, I don't think there's been much disturbing information about mining that could trigger panic selling and the decrease of the price. Bitcoin is only 3% down over the last 7 days which doesn't even look like something worth discussing. And speaking of hash rate, the drop probably shouldn't be attributed fully to these electricity issues in China, as it was predictable that some miners would leave after halving.

Lucius

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Quote from: Oasisman on May 24, 2020, 05:34:00 AM

Now, my question is, does the Sichuan electric issue causes Bitcoin to pull back from almost hitting the $10,000 level?

I wouldn’t agree that’s why the price hasn’t reached $10k in the past few days, because if we look at the price movement during this year, we can see that we already had $ 10k + in the first half of February ($10 500 Feb 13), which did not last long. I am of the personal opinion that purchasing power has dropped significantly globally, and that investors are extremely cautious about the possible new big drop in all markets. Some experts have been saying this since the pandemic was declared, referring to the past when several major but strong market corrections followed after the great drop.

Markets are still far from full potential, investors still choose less risky investments and BTC should not be expected to be an exception. The global climate is completely disrupted, and the delay in the rainy season in China is just one of the indicators - a warning has been issued for Europe that this summer will be perhaps the warmest in the history.

Jating

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It's already monsoon season in Asia as far as I know, so I guess this kind of issues will be resolved specially entering around June-October wherein a lot of rains and typhoon usually drops in that part of China. So I'm not sure if the electricity issues has been the cause of hashrate dropping or just miners simply pulling the plug because its no longer profitable because of the difficulty. I guess this is just a short term effect though, we might see it normalize starting June as far as electricity is concern.

dentolas

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I think that BTC is not passing the 10k level because it isn't being able to grab enough external investment... the price behaviour is too similar to a bait on a hook, waiting for the big fish to bite and then pump the price... I guess that the world economics is not helping either
As for the hash rate, it has never been higher (statement considering values before the halving), and it has been growing for a long time... as for the price we can't say the same... the hashrate is undoubtedly important as the network health and strenght resides on it, but I don't think it can easily affect the price unless we see a large increase or decrease that might lead to FUD or FOMO

NotATether

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Quote from: Oasisman on May 24, 2020, 06:03:20 AM

That's another interesting thing to discuss.
I was really thinking about the correlation between these two. So, I was assuming with just a mere observation in the crypto market that it can affect the price movements of Bitcoin.
This was also being discussed in several social medias.

There's no apparatus that connects the mining difficulty to the price bitcoin will trade at because mining difficulty is something that's controlled at the protocol level while price movements are controlled solely by buying and selling orders, or the lack thereof, as with other market securities.

Maybe you were thinking about the coins miners hold from newly mined blocks. Once coins are mined and placed in somebody's wallet they don't have any relation with the mining process anymore, and may then be moved to places like exchanges where their presence can influence the price in relation to some other currency that's also being held there, same reason why the action of halving doesn't change the price by itself.

I don't think that bitcoins sitting in a standalone wallet can influence the price because there is no supply of dollars held in the wallet that can be moved around.

eaLiTy

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Quote from: Oasisman on May 24, 2020, 05:34:00 AM

Now, my question is, does the Sichuan electric issue causes Bitcoin to pull back from almost hitting the $10,000 level?

The electric issue in Sichuan has nothing to do with the price of BTCitcoin. There is a correlation between miners switching on when the price of BTCitcoin rises and switching off when the price goes down but they do not control the price of BTCitcoin and i am not sure why people always have these kind of confusions.

I was not aware of the electric issues in Sichuan but there was a considerable hash rate drop after halving.

Oasisman

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Quote from: ranochigo on May 24, 2020, 05:43:10 AM

The mining hashrate is not fully indicative of the price movement of Bitcoin.

That's another interesting thing to discuss.
I was really thinking about the correlation between these two. So, I was assuming with just a mere observation in the crypto market that it can affect the price movements of Bitcoin.
This was also being discussed in several social medias.

Quote from: o_e_l_e_o on May 24, 2020, 06:01:54 AM

Secondly, I wonder if the decreased hashrate may be preventing people from selling their bitcoin. The mempool currently has 70 MB of low fee transactions waiting to be confirmed. A proportion of these transactions will be people who are trying to send their coins to an exchange to sell them, and haven't yet been able to. As the mempool has started to work down in to these low fee transactions over the last few days, so too has the price decreased by a few hundred dollars. I know correlation doesn't equal causation, but I found it interesting nonetheless.

I was also thinking about this. That's why I have concluded that the hashrate is somehow responsible for the pull back, because of the lack of Bitcoin movements, due to high transaction fees.

Topic: China electric issue causes Bitcoin to pull back (Read 323 times)