Bitcoin miners have been shaking the past few weeks. After the asset was split on May 11, miners’ rewards per block were halved from 12.5 BTC to 6.25 BTC. As a result, most of the miners using old model mining machines had to close because they could not make much profit. This led to a significant drop in the BTC hash rate.
With bitcoin recently falling below the $ 9,000 level, further fear of decline has been triggered. A possible liquidation can prevent new traders from entering the Bitcoin market. However, Capriole digital asset manager Charles Edwards says that it may be time to buy Bitcoin as the return of this situation.
Miners May Cause a Possible BTC Rally
Miners are downloading shutters due to the difference between hash rate and miner’s difficulty, selling Bitcoin assets to cover their costs and reduce losses. This process puts significant pressure on the Bitcoin market.
In a tweet on May 25, Charles Edwards stated that miners’ quitting jobs are currently continuing as a result of the halfway in 2020 and that BTC may continue to relax in the near term.
This capitulation is almost identical to the 2012 and 2016 halving capitulations (all within 21 days of the halving).
This is a massive bull flag.
The biggest drop ever since these occurrences:
The rallies from the Hash Ribbon Buy were almost vertical.
— Charles Edwards (@caprioleio) May 25, 2020
Edwards previously stated that the third half of BTC would be a difficult event for miners. Since the event, Bitcoin’s weekly hash rate has decreased by 26%. If we look at the previous two halves; In the halves of 2012 and 2016, miner surrender began within the next 21 days.
In the current table, miner’s surrender is often seen as a precursor of the “big bull flag”. It can be seen that this is a continuation of the upward trend of BTC.
Edwards did not disclose how much Bitcoin could rise after such a miner’s surrender. Nevertheless, he said in late December last year that an average income cycle of over 5000% was seen in Bitcoin.
Last 3 weeks in Bitcoin
Charles Edwards also noted that the rise of Bitcoin is supported by strong foundations.
Edwards suggested three factors to support his claim: 1) Major increases in Tether (USDT), 2) Funds from which all new BTCs were purchased in 2020, 3) Overall macro table behind BTC’s halved inflation rate. The second factor concerns the comprehensive monetary measures undertaken by central banks, particularly as a result of the COVID-19 outbreak.
Edwards said the buy signal could be confirmed in less than three weeks. This may be the last chance to accumulate BTC before the asset starts flying.