Following yesterday’s turbulence in the cryptocurrency markets, Bitcoin has struggled to stay above $4,000 and may witness increased selling pressure over the coming days. Some analysts have attributed Bitcoin’s poor recent performance to the increasing unprofitability of mining, but recently reported statistics say otherwise.
At the time of writing, Bitcoin (BTC) is trading up 1.5% at its current price of $3,960, down from over 10% from its seven-day highs of $4,400, which was set during the relief rally that proceeded Bitcoin’s drop to its 2018 low of $3,600.
Although Bitcoin has been unable to decisively settle above $4,000, the region immediately surrounding this price appears to have been established as a level of support. If Bitcoin continues drifting downwards, the next level of support that investors should watch for is $3,600, which is currently BTC’s 2018 low.
Recently, analysts have claimed that the persisting bear market can be attributed to the increasing unprofitability of mining, which is leading many miners to turn off their rigs until the prices climb back up to levels of profitability.
Despite this, recent figures reported by Fundstrat Global Advisors actually show that the cost of mining has been decreasing directly with the price of Bitcoin, which means the narrative connecting mining activity to the price of Bitcoin may simply be an attempt to justify the current market conditions.
Sam Doctor, the head of data science at Fundstrat Global Advisors, spoke to MarketWatch about the decline in mining cost, explaining that it is the direct result of more efficient mining hardware – like the Antminer S9 – and Bitcoin’s price decline.
“Our model suggests the cash cost of mining each BTC on the Antminer S9 is now $4500, down from $5300 in September. Depreciation expense has fallen to $1300 vs. $2000 in September, reflecting a lower rig cost as newer devices have come to market. Fully loaded breakeven is now $5700, compared with a breakeven of $7300 in September,” Doctor explained.
Altcoins Experience Mixed Trading, EOS and BCH Worst Performers
Although Bitcoin has been relatively stable today, altcoins are experiencing a mixed trading session.
At the time of writing Binance Coin (BNB) is the top performing altcoin, trading up nearly 15% at its current price of $5.83. BNB’s recent surge is the result of the exchange’s CEO, Changpeng Zhao, announcing that the company is close to launching their own decentralized blockchain – referred to as Binancechain.
Today’s worst performing altcoin is EOS, which is trading down over 7% at its current price of $2.42.
Bitcoin Cash (BCH) is also having a rough day, trading down nearly 6% at its current price of just over $150. BCH has been spiraling downwards ever since its hard fork event that occurred on November 15th.
All the cryptocurrencies mentioned in this article are available to trade on covesting.io