On-chain analyst Willy Woo pointed out that according to reports later last week, Xinjiang issued a power outage notice to facilitate safety inspections in response to a recent flooding accident in a local coal mine. In that accident, 21 miners were temporarily trapped underground due to power and communication interruptions.
According to the Cambridge Bitcoin Power Consumption Index (BECI), Xinjiang accounts for nearly a quarter of the global Bitcoin network computing power.
The analyst pointed out that yesterday, the Bitcoin network computing power had its biggest one-day drop since November 2017. According to Ycharts data, its computing power plummeted from 172 million TH/s per second to about 154 million TH/s. .
Popular crypto market analyst Willy Woo attributed the sharp drop in cryptocurrencies on April 18 to the sudden drop in Bitcoin’s computing power caused by power outages in Xinjiang, China.
Woo pointed out that on April 16, 9,000 bitcoins were transferred to Binance, and Woo speculated that these funds might have been sent by “a giant whale with a deep understanding of China.”
Coupled with the massive sell-off in the quarterly futures market, the downward momentum prompted the liquidation of Bitcoin worth $4.9 billion, and the margin call of $4.4 billion in the altcoin market, and the number of liquidated accounts reached a record 1 million.
However, not everyone agrees with Woo’s analysis. Adam Cochran, a partner at Cinneanhaim Ventures, said that “the idea that a power outage in a mining area in China caused a drop in Bitcoin last night” is “outright nonsense.”
You may see some graphs claiming that there is a connection between mining power and Bitcoin price decline, including the “causality” and “correlation” that many people who do not understand mathematics say.
-Adam Cochran (adamscochran) April 18, 2021
Woo pointed out that long-term giant whales who hardly sell Bitcoin bought a lot during the downturn. He added that the range below $50,000 is forming “the largest price discovery cluster since Bitcoin was below $10,000.”
He said: “The effectiveness of Bitcoin as a trillion-dollar asset is very strong. 13.5% of the total supply of Bitcoin has been transferred to the chain, and the market value of Bitcoin has exceeded $1 trillion.
Author/ Translator: Jamie Kim
Bio: Jamie Kim is a technology journalist. Raised in Hong Kong and always vocal at heart. She aims to share her expertise with the readers at blockreview.net. Kim is a Bitcoin maximalist who believes with unwavering conviction that Bitcoin is the only cryptocurrency – in fact, currency – worth caring about.