Short-term holders of Bitcoin, whose coins have been on their wallets for less than 155 days, have already recorded losses for the most part. Now, many of them have turned to short positions on Bitcoin futures contracts in the hope of profiting from the fall of the cryptocurrency. Futures contracts allow you to buy and sell cryptocurrency without actually delivering it.
A commission is charged for holding a futures contract, which can be positive or negative. Over the weekend, the financing rate on derivatives exchanges went into negative territory. This indicates a preponderance of sellers who are willing to pay a commission for holding a short position.
At the same time, the ratio of long and short positions from 1:1 at the Bitcoin price of $47 thousand reached 1:3.5 at current prices, according to an analyst from TSD. The probability of a price drop to the level of a nine-month low of $35.7 thousand has sharply increased.
Despite the protracted correction, the mining difficulty record is expected to be updated in two days with an increase of 4%. Publicly traded mining companies are to blame for breaking the link between complexity and price. Due to the constant attraction of investor funds, they are updating the ASIC fleet, while remaining unprofitable. A bright representative is Riot Blockchain, which plans to increase computing power from 3 EH/s to 12.8 EH/s in a year. The histogram below shows the ratio of income to profit by year.
Top ASICs allow you to earn income at a lower price and increasing complexity.
Now the cost of Bitcoin mining is estimated at $33 thousand.
This allows companies to maintain a high level of hashrate, as well as to sell part of the mined coins for operating expenses. A potential correction of Bitcoin to the $35 – $36 thousand zone will not have a significant impact on the activities of large miners.
Probably, the trigger for the fall will be a significant increase in the Fed’s rate in early May. This will strengthen the US dollar against most of the financial instruments traded with it in a pair. This also explains the increased activity of speculators opening short positions on Bitcoin.