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- According to insights from a graph shared by mining giant F2Pool, most Bitcoin mining rigs are now unprofitable, with only about five rigs still recording gains for their operators.
Bitcoin has dropped below the 200-day Simple Moving Average (SMA). Typically, when the market trades below the 200-day SMA consistently, it is considered to be in a downtrend pattern.
Bitcoin (BTC) price has faced intense selling pressure this week, contributing to its fall to levels last seen a few months ago.
The flagship cryptocurrency recently fell below $54,000, causing investor anxiety. At the time of writing, BTC was trading at $54,266.04, reflecting a 7.85% drop over the last 24 hours. The persistent decline in Bitcoin’s price has once again pushed many mining rigs out of profitability.
Antminer and Avalon Bitcoin Mining Rigs in Profit
According to insights from a graph shared by mining giant F2Pool, only about five mining rigs are still generating gains for their operators.
Specifically, the graph indicated that four of Antminer’s various rigs and one Avalon rig are profitable. However, this profitability holds only as long as prices remain above $53,100.
“At a rate of $0.08/kWh, ASICs less efficient than 23 W/T operate at a loss,” F2Pool stated in the graph.
Other mining rigs are operating at a loss because their running costs significantly outweigh the earnings operators receive in the form of rewards.
Notably, as entities that supply computing power to various blockchain networks, miners are entitled to “rewards” as incentives for their services.
Upon receiving these rewards, which typically come in the form of BTC, miners sell them to cover their operational costs.
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Meanwhile, mining operational costs, such as electricity bills, are relatively high and have led to many mining facilities filing for bankruptcy in recent years.
Miners contributed significantly to the Bitcoin price selling pressure observed in the crypto ecosystem last month.
A significant number of them sold up to $1 billion worth of BTC within two weeks. This selloff occurred while the coin’s price fluctuated between $65,000 and $70,000.
With the mining market suddenly becoming unprofitable, some market observers suggest this could signal a local bottom.
They base this argument on the fact that there is currently less selling pressure.
Dovey Wan, a partner at digital assets fund Primitive Crypto, was among the market observers who shared their views on the unprofitability of mining rigs and their operators on X.
“Bitcoin miners are (an) inch away from capitulation, S19 break even at 52k,” Wan outlined in his X post on Friday. “This is a perfect setup for the local bottom.”
Bitcoin Price Drops Below 200-Day Simple Moving Average
As it stands, Bitcoin has dropped below the 200-day Simple Moving Average (SMA). Typically, when the market trades below the 200-day SMA consistently, it is considered to be following a downtrend pattern.
Conversely, assets that trade above the average are considered to be heading in a bullish direction.
A glance at the market shows that the firstborn digital currency is in a sustained downtrend mode.
If Bitcoin does not find a support level, it may head to $52,000 or even lower, as crypto critic Peter Schiff speculated.
