After the Miner Elimination Stage, BTC Rockets to the Sky

Liu Jiaolian
Delicate clouds weave a clever design, a shooting star carries a tale of sorrow, and the Milky Way silently passes by. When the golden wind meets the jade dew, it surpasses countless encounters in the mortal world.
Since breaking through the 30-day moving average on the 15th, Bitcoin has experienced a major trend reversal and has risen all the way to 67k, with three consecutive bullish candlesticks.
We can see that since the Bitcoin halving on April 20th, we are currently going through a period of consolidation. So, what kind of stage is this?
In response, anonymous analyst PlanB pointed out that based on past halvings, after each halving, miner income experiences a 2-5 month decline and recovery phase, followed by a rapid increase. (See the chart below)
[img]
Please note that this is a chart of miner income, not the BTC (Bitcoin) price chart.
This is the “conspiracy” of BTC. In a situation where short-term price levels remain relatively stable, a halving in production means an immediate halving of block rewards. Although there was a brief frenzy around Runes, it has long since died down.
This is a painful stage – at least for the group of miners.
Miners with insufficient strength were directly wiped out. Miners with strong capabilities and solid foundations need some time to recover. Survivors stand up on the bones of those who have been eliminated. With fewer people sharing diminishing food, everyone can regain health and vitality. This stage can also be called the miners’ elimination round.
The eliminated miners struggle desperately before dying. They will sell all their accumulated BTC in order to survive.
[img]
Unfortunately, their selling has had the opposite effect of what they expected: it neutralizes the supply shock and price increase that the halving should have brought. The suppressed price is like a noose, tightly strangling their necks. The more they struggle, the closer the noose gets, accelerating their own demise.
When the weak have been completely eliminated and have exhausted all their accumulated wealth, the strong accept everything that remains, start to recover and become stronger.
What doesn’t kill you makes you stronger.
Survival of the fittest.
After the cruel elimination round, the surviving miners earn profits. The BTC system pays them in BTC on time. Miners only need to sell a portion to cover their mining costs. They will hoard the remaining BTC and sell it at a higher price.
After all, in this industry, the longer you survive, the more you understand the value of BTC holdings.
With reduced selling pressure and increased hoarding, the effect is multiplied.
What’s even more wonderful is that the secondary market is now starting to feel the impact of the halving-induced supply shortage. The same amount of dollars now has a greater impact on pushing up the price.
The rising price allows hoarding miners to sell less BTC to cover the same amount of mining costs in dollars. This further alleviates selling pressure.
The rising price and reduced selling pressure mutually reinforce each other, entering a positive feedback loop.
With the propulsion of this positive feedback loop, combined with the “reflexivity” effect that exists in the secondary market – where more buying and higher prices form a positive feedback loop, further resonating with each other, greatly enhancing the effect.
So Bitcoin launches like a rocket. Ta Da Moon.
(Official Account: Liu Jiaolian. Knowledge Planet: Reply “Planet” to the official account)
(Disclaimer: The content of this article does not constitute any investment advice. Cryptocurrencies are high-risk assets with the risk of going to zero at any time. Please participate with caution and take responsibility for yourself.)
Tags:
Liu Jiaolian
Investment Insights
Bitcoin
Essay
Source Link:
https://mp.weixin.qq.com/s/s3EL5SDPHQ0esDVuCGz9nA
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Original Article Link: https://www.bitpush.news/articles/6749470
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