BTC Slumps as Kazakhstan Miners Power Down: Markets Wrap

BTC briefly trades below $44,000 as global hashrate declined earlier today
This BTC sell-off has not been driven by forced long liquidations

Authorities of Kazakhstan declared a nationwide state of emergency today and shut down the country’s internet.

As a result of the internet outage, the global hashrate took a dive earlier before later recovering.

This BTC sell-off is not the result of forced liquidations.

Serena Williams purchased a CryptoPunk.

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Latest in Crypto:

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Kazakhstan

Authorities of Kazakhstan declared a nationwide state of emergency today as citizens against the rise of fuel prices.

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“Protests spread across the nation of 19 million this week in outrage over a New Year increase in prices for liquid petroleum gas (LPG), which is widely used to fuel cars in the west of the country,” read an article from The Moscow Times. “Thousands took to the streets in the country’s biggest city Almaty and in the western province of Mangystau, saying the price rise was unfair given oil and gas exporter Kazakhstan’s vast energy reserves.”

Hashrate drops

Due to the protests, Kazakhstan’s government shut down the nation’s access to the internet, according to The New York Times, which led to many bitcoin miners going off-line earlier today.

The hashrate dropped from a high of 194 EH/s on Jan. 4, to a low of 168 EH/s during the internet outage in Kazakhstan today, according to data from Coinwarz. (It is worth noting that hashrate is calculated differently by various sources.)

Bitcoin hashrate drop. Source: coinwarz.com

Kazakhstan accounts for roughly 21.9% of the global hash rate, according to the University of Cambridge. The internet outage is likely the reason behind the drop in global hash power online.

BTC derivatives

Unfortunately for BTC bulls, this move lower can’t be attributed to forced liquidations. $310 million worth of long positions have been closed, but futures open interest dropped just $840 million according to data from Coinglass.

Source: Coinglass

Perpetual funding rates show a slightly positive bias across most exchanges, so long side traders are still paying shorts to keep their positions open, according to Laevitas.