中 "90% Coin Mining Shutdown"... Bitcoin Surpasses Dead Cross

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min, Beijing=Correspondent Jo Young-shin] Chinese media reported that China’s crackdown on cryptocurrency mining, including Bitcoin, has led to a 90% decrease in mining volume within the country. Bitcoin prices sharply dropped at one point due to the combined effects of Chinese regulations and the occurrence of a dead cross.

The Chinese state-run Global Times reported on the 21st that regulatory authorities in Sichuan Province have intensified their crackdown on cryptocurrency mining, resulting in the closure of most mining companies in the province. Located upstream of the Yangtze River, Sichuan Province produces electricity through hydropower, making electricity costs relatively cheap and ranking it as the second-largest cryptocurrency mining area in China.

The Sichuan Development and Reform Commission and the Sichuan Energy Bureau previously instructed local power companies on the 18th to cut off power supply to companies suspected of cryptocurrency mining. The regulators also disclosed the names of 26 suspected mining companies. They issued a notice requiring local power companies to directly investigate these companies by the 25th and report the results.

Regarding this measure, a representative from a Sichuan mining company said, "Many mining companies have suffered significant losses due to the authorities’ actions," adding, "Companies are struggling to find new mining locations, but it is not easy."

The Global Times cited experts saying that with the ban on cryptocurrency mining extending from Inner Mongolia, Qinghai, Xinjiang Uyghur, and Yunnan to Sichuan, the volume of Bitcoin and other cryptocurrency mining in China will decrease by 90%, and one-third of the global mining volume will be reduced.

In fact, Bloomberg reported that the ‘hash rate’ for Bitcoin mining fell by 17% in a single day. Typically, a decline in hash rate indicates a drop in Bitcoin prices. As a result of the hash rate decline, Bitcoin prices fell to the $33,000 range.

On the same day, Bitcoin also recorded a ‘dead cross,’ where the short-term moving average (50-day) crossed below the long-term moving average (200-day). Generally, a dead cross is seen as a sign of further price declines. Bitcoin has experienced six dead crosses so far.

Wang Feng, associate professor of Artificial Intelligence (AI) at Renmin University of China, said, "The Chinese regulators’ large-scale measures are aimed at preventing financial system risks and stopping illegal activities such as money laundering."

This content was produced with the assistance of AI translation services.