The cryptocurrency space has experienced a wave of forced selling after mote than $800 million worth of long positions were liquidated in the past three days, representing the heaviest liquidation events since April, according to CoinGlass data.
These liquidations came amid a wide cryptocurrency market sell-off that has seen the space’s total market capitalization drop by more than $400 billion in a month and over $65 billion in the last 24-hour period, with the price of Bitcoin dropping to a low above the $53,000 mark before starting to recover.
Bitcoin is at the time of writing trading at 455,200, while Ethereum dropped below the $3,000 mark to now trade at $2,950. Other major cryptocurrencies including BNB, Solana, XRP, TON, and DOGE all saw double-digit drops over the past week, with DOGE losing a whopping 22% of its value over the period.
As Bloomberg reported Bitcoin miners, who rely on powerful machines to secure the Bitcoin network and get rewarded with BTC for doing so, are still grappling with the financial impact of the halving event in April, which reduced the coinbase reward they received per block found in half. In response, some miners have been forced to sell off portions of their bitcoin holdings.
These miners are selling alongside the German government , which has been slowly moving funds from a wallet in which it has over 46,000 BTC onto cryptocurrency exchanges. The German government’s Bitcoin stash was originally of nearly 50,000 BTC, seized from the operators of a film piracy platform, Movie2k.to, which was last active over a decade ago.
On top of all this, defunct cryptocurrency exchange Mt. Gox has recently started repaying creditors in a move that puts an end to a 10-year long waiting period for users to get their digital assets back.
The exchange dominated Bitcoin trading volumes before it suffered a security breach in 2014 that resulted in the loss of an estimated 740,000 BTC and their bankruptcy. Some of the BTC was recovered and is now being returned to creditors, who analysts believe will sell the coins on the market after their 10-year waiting period.
Data compiled by CryptoQuant reveals that daily miner revenue has plummeted by 75% since the halving, currently sitting at $26.5 million. Transaction fees earned by miners have also dropped dramatically, falling to just 3.7% of their total revenue, compared to a peak of 75% earlier in April.
According to Le Shi, head of trading at market maker and algorithmic trading firm Auros, the $51,000 to $52,000 range is critical as “a lot of Bitcoin miners are reaching their break-even point for profitable mining.”
Featured image via Unsplash.