$BTC is going through a rough patch as it price has fallen nearly 30% from it peak of $126k, but the real pain lies with the miner. The pressure from skyrocketing mining difficulty is turning mining into a fight for survival.
š¹ Mining difficulty hit a historic peak of 155 trillion in mid November, pushing competition to unprecedented level.
The average cost to mine 1 $BTC is now $74,600.
With BTC trading around $90k, miner profit margin are as low as 20%. In a context of high volatility and high risk, this is an extremely dangerous margin.
šø Despite the huge cost pressure, miner have not shown any signs of capitulation.
Bitcoin Miner Position Index MPI is at -0.9, down sharply from the peak of 2.17 in late November.
Implication: A negative MPI indicate that miner are choosing a HODL strategy holding coin instead of dumping to cut losses or cover cost.
š¹ Miner belt tightening behavior and refusal to sell cheaply is a positive fundamental signal. History show that when miner are determined to hold on to their stock despite rising cost, it is often an accumulation phase before the market establishe a new uptrend.
Miner are betting on the future of Bitcoin. If they do not sell at this price, will the Bear have enough strength to push the price down further?
Do you think $74,600 mining cost will be the hard floor for Bitcoin price in this cycle?
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