We just saw the single largest 1-day drop in mining hash rate since Nov 2017. The hash rate on the network essentially halved, causing mayhem in BTC price as it crashed.
The power outage in Xinjiang (which powers a significant amount of the BTC mining network) was known before the BTC price crash. Here's local news on 15th April.
9000 BTC was sent into Binance, read that as a sell off of those coins.
I'd note that Binance serves volume from Asia more than the West. It's likely this was sent in from a whale with closer knowledge to happenings in China.
This sell down was compounded by sell off of quarterly futures (used by more sophisticated traders) on derivative markets which was already underway as early as 13th April.
The two combined sell pressures was sufficient to tip the price below liquidation levels ($59k).
This triggered a cascade of automatic sell-offs in a chain reaction.
$4.9b contracts were liquidated, $9.3b including alt-coin markets.
1m trader accounts liquidated in total.
This dip happened while unprecedented numbers of new users are arriving onto the network per day. There's been a retail influx in the last 2-3 weeks.
Strong holders are buying this dip (red = Rick Astley genre of holders)
Supply profile (price when the supply last moved), now forming the largest cluster of price discovery since BTC was below $10k. Validation of BTC as a trillion dollar asset is immensely strong.
13.5% of the entire BTC supply last moved above $1T cap.
The on-chain SOPR metric near a full reset. A classic buy the dip signal.
In simple terms, profit taking by longer term investors is completing, very little sell power left unless investors want to sell at a loss from their entry price. Unlikely in a bull market.
Summary:
- Initial sell off due to anticipation of miners going offline in China.
- Sell pressure was sufficient to trigger liquidation of short term speculator positions forcing price violently down.
The parent entity, iFinex, is making huge profits with its Tether capital sitting in US treasuries. Tether earns $3b per year right now. iFinex also has 94,000 BTC returning from the Bitfinex hack funds seizure ($1.5b).
Capital moving to OKX may explain its exchange token performance in this bear market.
Anything that works will need trusted centralised parties.
If true, dapps and L1s are just a wild goose chase over an intractable problem.
Please prove me wrong.
Best way to prove me wrong is to name a dapp that provides a benefit that people want that cannot be done by better by existing Web2 and Bitcoin technology.
Example arguments:
- why a DEX will be better than a CEX
- seamless fintech inter-op across the web using MetaMask
I suspect the 2 key issues needed to be solved in order to have true decentralised apps that can fulfill the dream of "Web3" are:
- prevention of sybil attacks
- ability to peer into the global state across all L1s by any dapp. (I think this problem is provably intractable)