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Chinese authorities have launched a new crackdown on Bitcoin mining activity, particularly in the Xinjiang region, causing hash rates to fall to their lowest levels in three months and an estimated 400,000 mining rigs being taken out of service over the past few days.
Analysts say these developments have led to increasing selling pressure on Bitcoin, with the issue of restrictions in China once again coming into focus.
Hashrate is down about 8%, which is significant considering China continues to control about 14% of the network’s global hashrate.
Bull Theory analysts believe that long-term Bitcoin holders in Asia began selling weeks ago in anticipation of tightening restrictions, which is also confirmed by network data showing an increase in selling by long-term holders over the past two months.
The closure of mines has also forced miners to liquidate their Bitcoin reserves and sell equipment to recoup losses.
Meanwhile, trading data showed that net sales continued to grow in the fourth quarter on Asian exchanges such as Binance, Bybit and OKX, while U.S. exchanges led by Coinbase saw net buying.
Analysts confirmed that what is happening is not panic selling but a shift in supply, which is keeping prices under pressure until this wave subsides.
Luxor reports that since October, computing power has dropped by about 10%, and mining difficulty has been adjusted negatively three times in a row.
She attributed this to falling prices, rising seasonal energy costs and regulatory measures that have halted mining capacity.
“Hashrate prices” also hit all-time lows, increasing pressure on miners and forcing them to sell.
These factors have had a negative impact on the price of Bitcoin, which has continued to fall, failing to regain the $87,000 level and trading around $86,560, the lower end of the price range that has been in place since late November.
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