Hey yo, what is going on with my people, who I like to call the viewers of the tube First, let me introduce myself as Tyler and you are watching the crypto channel, that has the alternative views that make him a lone wolf, but as more people see the craziness for what it is, they begin to join, just like this wacky boi, at the sasquatch music festival 2009ā¦
you know how we get the party started Itās time for Chico Crypto! Well the Bitcoin party isnāt too popping right now, pulling out the 24 hour chart, itās actually extremely bearish, with a series of lower highs Starting at about 9100, then a dip, but rebound to a lower high of 9050, where I put in my short on Sunday, so far a great call! Because the price once again dipped, down to the 8800 levelwhich we tested 8850, and then got rejected back to the 8800 level So am I keeping my fully legal short open? Yes sir! Becausethings are not looking the best fundamentally with BTC in the short term because a miner purge is currently happening & an area where bitcoin mining is concentrated is currently at risk of being shut down! So to begin, letās analyze the current miner purge So we just experienced the 1st difficulty adjustment of the bitcoin network, post 2020 halving and for the minerās that survived it provided much needed relief Pulling out the difficulty chart, we can see it is only the second downwards adjustment in 2020, and since last year May 2019, itās only the third significant downward adjustment The significant majority in the past 365 days has been upwards So, we need to analyze the dates of the adjustments in the past, when we had those significant downward movements in difficulty, and what the effect was on the price
Of course during the crazy panic in March 2020, we had a downward adjustment but also from the chart we can see the other one cam in the beginning of November 2019 So what happened in March 2020well first we need to understand the difficulty adjustment comes every 2 weeks
And back in March of 2020, unfortunately the adjustment came right before the major March crashas we can see, the difficulty chart the adjustment came on March 9th upwards, as the price was still holding and miners were profitable at the level, as this was prehalving But then pulling out the price chart, bitcoin took a major dip and had rocky roads throughout March, only hitting 6k by the end of the month
Well 2 weeks after the March 9th adjustment came, and since the price was rockythe difficulty adjusted downwards, a major oneas the mining profitability slimmed out Now letās go to November 2019, the other time a significant downwards adjustment came 2 weeks before, the adjustment pumped on the day October 25th, and if we pull out the price chart, we can see why the price had a significant pump during the adjustment, so miners started to rally back onlineā¦but by the next adjustment, by November 7th a significant adjustment drop which if we pull out the price, it began deflating down
by the 24th of the month, to 7k So is whatās happening now, our current downwards adjustment, more like March 2020 or November 2019? I would have to say, more like Novemberas we didnāt just have a crazy dip, circuit breakers pulled as Bitmex went offline in the middle of global panic Now letās pull out the recent adjustment charts, we had an upwards movement back on May 4th pre halving, but then as we know we had a big dip Letās just pull out the november chart, very similar adjustment up, and then a big dip What about the price? Similar thing, during the adjustment in early may, the price got pumped
Pulling out the november 2019, price got pumped, but then it deflated down, a very, very similar thing happened today, although a tad bit more volatile, it is a downwards trend, and similar losses of about 1k I wonder what happened, in the 2 weeks after in November to the price? It deflated down, even more significant down to the 7k level I am no predictor, I am no mind reader, but fundamentally things look similar to november and I would expect a similar thing happening to the price, I have my eyes set on the high 7ks in the short term Why? We still have 10 days at the current difficulty, and if the price keeps slowly moving down or even staying at the current levels the pressure put on miners is going to be like something they havenāt seen in ages The relief given, to those hanging onto breakeven from the recent adjustment downwards, is being nullified by the falling prices
And if you go to the bitcoin difficulty estimator, they are predicting with the next adjustment which happens between june 4th and june 5th, for it to go down once again And another significant oneā¦ The first time, for the difficulty to go down 2 times in a row, in looong time, since the end of 2018
Now, we know where most of the Bitcoin hashrate comes from China! Itās no secret that they have the largest distribution of bitcoin mines, large and small in the world And the bitcoin mining pools are usually chinese owned and controlled The university of cambridge, put out some nice data, which showed based on analyzing 3 pools, poolin, f2pool, and viabtcthat the bitcoin hashrate was coming over 65 percent from China Although numbers would be less if we added all pools, globally and averaged it out, as f2, poolin, and via are all chinese, thus the sample would be skewed heavily towards china I would put the number actually around 60 percent, if we used all global pools But if we switch to China, they break down hashrate by region in the nationā¦
as we can see 966 percent of the hashrate is coming from the Sichuan Regionā¦ What is this region all about? Well like I said in the beginning, there is an area of the world with a large concentration of bitcoin miners that is being threatened And it the Sichuan Regionā¦Now, if we took our personal estimates that 60 percent of the global hashrate in controlled by China, and we took 966 percent of that, the Sichuan region would control 5
25 million Terahashes, of the global 906 million powering the bitcoin network or 57 percent of global hashrate Significant yesand many outlets are covering what is happening Headline here, āBitcoin Miners in Sichuan Province Ordered to Shut Down in āOrderly Mannerāā Which they say, sichuan roughly controls 10 percent of the global hashratefalse, you guys, its 5
7 percentā¦ Now, the story comes from this document, which is reportedly from the Department of Finance, of the people government of the sichuan provinceand translated says, that miners are ordered to begin shutting down their operations, in an orderly manner
So that right there, could mean a big shake up, as Sichuan is home to the branch offices, of Bitmain and itās mining pool, antpool and other large mining outfits, obviouslyso is this something which could shake throughout the entire country and spread to other regions, or is this just limited to the single province? Well Chico, thinks the latter, as in December of 2019, Coinshares analyzed the bitcoin mining network, and they estimated china to control over 66 percent of the hashrate, and guess what region was #1? Sichuanthey had 54 percent of that hashratewell according to cambridge, that has dropped to just 9
6 percent, and now Xinjaing is the dominant region So, if they do force the 96 percent that is left, because it looks like the purge from this region has been going on since December, the profitable and efficient miners will just move to other more friendly regions So long term, itās not much of a storyā¦ But short term, it will add to the downwards sell pressure, in my opinion, as these operations will have to sell and dip into their reserve BTC stashes to move
moving costās money you knowā¦ Well you guys, you wonāt see me drawing lines on a chart, I look to the fundamentals and that is where I base my decisions Because you know your boi, Chico is based Cheers Iāll see you next time!
