Another Chinese Power Outage Could Be The Reason Behind BTC Crash

Another Chinese power outage could be the reason for the latest Bitcoin crash as we saw the previous one in April causing a crash as well because of the Chinese coal mine in Xinjiang that we reported in our latest Bitcoin news today.

The hash rate of BTC plummeted 30% in one day which crippled the rally of the cryptocurrency and now the hash rate is suffering a loss as the miners based in Sichuan, China, face limitations on the power usage. The State Grid in Sichuan’s Aba county which encompasses a huge portion of the region’s hydropower issued a notice back this week that required the enterprises locally and the households to limit their power consumption as the province as met with a huge utility demand.

The notice was aimed at all operations that are located in the region’s Hydro-electricity Consumption Industrial Demonstration Zone. The zones were created by the government as a form of incentive for power-intensive industries to utilize that cheap hydroelectricity during the summer months and most of the BTC mining facilities were operating in these government-sanctioned industrial zones. The BTC network’s total hash rate peaked at 180,67 million TH/s at the start of the month which is a 37% rebound from the incident in April. Since May 16 when the miners in Sichuan went offline, the total hash rate dropped from 172.36 million TH/s to 150.653 million.

The sheer size of the mining facilities in China and the implications of the shutdown can be seen overall as the miner revenue. As per the on-chain analytics site Glassnode, the total miner revenue dropped from $1.23 billion to 692 million, marking a 50% crash. This was when BTC suffered a flash crash down to $37,000 earlier while Musk and the liquidations were major factors that led to a huge sell-off earlier last week when the power outage in Sichuan happened and lead to this week’s bloodbath.

Another Chinese power outage is now the main reason for the BTC crash and the Sichuan State Grid didn’t provide a timeline as to when the power limitations on the region will be lifted. A report from China Times stated that the miners could go online after May 25.

Source: https://www.dcforecasts.com/bitcoin-news/another-chinese-power-outage-could-be-the-reason-behind-btc-crash/