Most of the selling pressure since mid-Jan has come from F2Pool (largest Chinese mining pool) affiliated wallets and it is now becoming clear why. The Inner Mongolia region of China is banning bitcoin mining. This region is responsible for 9% of the world’s BTC mining. It’s a coal powered region however, which is the problem. Beijing has come down on them for not meeting carbon neutrality targets. They have until end of April to shut down, but it would appear they first got notice of this back in mid-January based on the BTC selling history. Most will likely either move to the surplus hydro power regions of China or they will sell their rigs and shut down. Apparently some will even be moving overseas. Many of these miners secured loans using their mining rigs as collateral, either to pay their bills so they didn’t have to sell coin while the price was rising, or to buy more rigs or bitcoin…but either way many are forced to sell some or all of their bitcoin to pay back loans or pay for their move.
The big question is, when will this selling stop? End of April seems like the logical answer but I suspect it will taper off well before then. Anyone moving, would have started the process by now I suspect.
There does also ‘appear’ to be F2Pool affiliated manipulation selling at times as well, like when there is heavy selling prior to the month end futures expiry they are involved. However, there does seem to be a lot of coordinated FUD around this same time period which has me thinking other players are involved in this end of month manipulation and it’s possible that some or all of the F2 selling at end of month could just be panic selling, like if they were waiting for a higher price to sell, but pulled the trigger when they saw the price starting to plunge down. Hard to say for sure. When it comes to futures expiries and for example call options, there is usually a particular strike price that jumps out at you in term of open interest. For example, for tomorrow’s weekly expiry, $50K is the price that jumps out at you. I told a friend a few days ago don’t be surprised if the price is 49K on Friday. If that theory holds, the following week, the magic price is $66K, so let’s see if we see a very strong next week.
One thing I’ve noticed of late is that the only time BTC price goes down is when there is selling pressure from F2Pool and whenever they are not selling the price surges higher. So the big takeaway is that when they stop selling, we should see a moon shot.