On April 15, a widespread power outage in northern China caused the Bitcoin hash rate to drop sharply. Since there are large mining operations in China, there has been a corresponding drop in hash rate of 20%.
The China Hash Rate Crash of 2021
As a result of the drop in hash rate, the backlog in transaction processing grew rapidly, resulting in an increasing transaction fee. With the high mining fee, Bitcoin miners made nearly $ 16.7 million in just 24 hours.
Wu Blockchain noted the following in a tweet today:
“The fees for Bitcoin miners have increased significantly. The fees paid to Bitcoin miners in a single day totaled $ 16.76303 million. The main reason is that the power outage and inspection in northwest China reduced the hashrate by 20%, resulting in a backlog in transactions. “
It seems that due to the backlog, some users have increased their miner’s fee to speed up their transactions.
“There are many unpacked transactions in a short amount of time that cause transactions to be queued, and there is a limit to the number of transactions the network can process in any given amount of time. Users who want a transfer increase the miner’s fee, ”added Wu Blockchain.
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This limited the number of transactions that could be processed and verified at this point. Therefore, many transactions were held on the blockchain that were pending for over 9 hours. Many analysts have attributed the recent price correction to the mining outage in China, which has sparked new concerns about the impact of a power outage on BTC and the blockchain as a whole.
The controversy began when many claimed the Bitcoin network’s hashrate dropped 40% on April 18th. However, others pointed out that the power outage in China occurred on April 15 and the drop in hash power in mining was no more than 20%.
The Bitcoin hashrate dropped abruptly. Price soon followed | Source: BTCUSD on TradingView.com
Bitcoin is slowly recovering
Since the power outage, the issue of power failure in mining has continued to be a heated discussion in the crypto community. As Bitcoin fell from a new all-time high of $ 64,683 to around $ 54,000, BTC’s exchange rate supply continued to decline.
Bitcoin price is currently consolidating above $ 55,000 with support at $ 54,000. The nearly 10% drop on April 18, however, was nothing out of the ordinary as the king’s cryptocurrency posted a drop of over 25% during the current bull rally. For comparison: in 2017 there were price reductions between 10% and 25%, which occurred about six times. While the current bull run has only seen one such major retreat.
Related reading | Bitcoin Price Nosedives $ 5k Why BTC Might Extend Losses
According to Rekt Capital, the decline from the new all-time high hasn’t affected the coin’s bull trend.
In 2017 #BTC had 5 large bull market corrections that were -30% to -40% deep. In 2021, BTC only had a -31% bull market correction $ BTC is down -20% from its ATHs of ~ $ 65,000 #Bitcoin went much deeper and still maintained its bull trend
It seems that Bitcoin is still far from its peak and, despite the retracements, expected to spike above $ 65,000 soon.
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