Cryptoasset market and network data analytical agency Coin Metrics has issued research according to which cryptocurrency miner-led selling pressure for bitcoin (EXANTE: Bitcoin) is likely to continue.
It is expected that the increase of selling will be caused by the upcoming halvings for bitcoin cash (BCH) and bitcoin sv (BSV) that are scheduled on April 8 and April 9, respectively.
Given the fact all the cryptocurrency projects are using the same SHA-256 mining algorithm, miners will seamlessly redirect their hash power to the asset that provides the highest profits on investment.
"When bitcoin cash and bitcoin sv halve their block rewards, this should force miners to direct even more hash power to bitcoin as it will still have a 12.5 native unit block reward (instead of 6.25) for about a month longer. Therefore, we should expect difficulty increases for bitcoin that should further squeeze profit margins for all miners," Coin Metrics said.
As mining will eventually become unprofitable due to the low prices, miner capitulation will increase selling pressure until inefficient miners are forced off the network. However, in the long-term perspective, this "purge" is reportedly supportive for prices.
"Eventually, if prices bottom and recover, the pro-cyclical behavior of remaining miners should support further price increases," the agency pointed out.
Earlier iHodl reported that popular graphics cards maker NVIDIA called on crypto miners to contribute to the fight against the coronavirus epidemic by sharing the computing power of their devices.
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