Bitcoin (BTC) crossed the $20,000 threshold on Tuesday, going up to $20,185 or gaining 4 percent. The token previously spent three weeks below the mark.
Eight founder Michaël van de Poppe said BTC was “ready for that relief run” after crossing the crucial mark. Analyst Il Capo of Crypto shared a similar opinion, saying that BTC had “enough fuel” to keep a bullish trend. However, the market has yet to be able to predict the end of the trend.
Coinglass reported that the BTC’s short-position liquidations went above $165 million on Tuesday, higher than liquidations in several months.
BTC suffered from months of market decline after the U.S. Federal Reserve decided to begin hiking increase rates. The move caused turmoil in the crypto market as investors became wary of high-risk assets like virtual currencies.
Throughout the year, BTC has moved in tandem with the stock market. Per Tuesday, the 60-day correlation coefficient between BTC and S&P 500 contracts was at 0.63, indicating a relatively high correlation.
Crypto Quant CEO Ki Young Ju said that crypto whales had begun buying BTC on Binance. Ki explained that the moment Bitcoin hit $20,000, its spot trading volume in Binance “skyrocketed” to 84 percent. The second biggest spot trading volume for BTC occurred in Coinbase, at nine percent.
“Not sure whether these whales are institutions using prime brokers or crypto OGs (original gangsters) for now,” Ki said.
The CEO further discussed the situation in the BTC futures market, saying that most traders there were whales. Ki said that the average BTC deposits to derivative exchanges were high compared to other exchanges.
Other than BTC, other crypto tokens also saw gains on Tuesday. Ethereum (ETH) rose by 10 percent to $1,476, its highest price in October. Solana (SOL) and Dogecoin (DOGE) also strengthened against the U.S. dollar. The daily crypto short liquidations went beyond $400 million.
BTC miners pressured
Data showed that BTC’s hash rate surged throughout October, reaching an average of 269 EH/s last week. This development caused a steep decrease in hashprice, meaning that miners saw a lower profit margin for BTC at around $66.8 per petahash.
Coupled with volume inconsistency, the surge in hash rate caused miners difficulties in mining within the network. In recent months, mining operations have also expanded, which increases competitiveness. A number of ETH miners also started to mine BTC following Ethereum’s transition to a proof-of-stake mechanism.
Another challenge that miners face is the increasing operational costs of mining BTC. Crypto mining sites require a vast supply of electricity to operate. With rising energy costs around the globe, crypto miners need to pay more to keep the operation running. A number of miners have moved their operations to countries like Kazakhstan due to affordable energy costs.
Experts argue that sustainable mining might help the crypto industry to recoup profitability and ease pressures from regulators. Crypto miners can utilize renewable energy sources, install sophisticated cooling systems and increase production capacity.
Renewable energy sources that the crypto mining industry uses in its operation includes hydroelectricity, solar panel and wind power. Crypto miners in Norway, who are among renewable energy users within the industry, hold one percent of global BTC mining.