The bitcoin mining sector has been affected by the declining price action of BTC. This has forced BTC miners to reduce their inventory, which could lead to continued selling pressure on the crypto market and reduce their leveraged positions.
Related Reading | Iran to shut down crypto mining farm as energy crisis deepens
Publicly traded BTC mining company Bitfarms announced that it has sold 3,000 BTC in the past seven days for approximately $62 million. According to a press release, the company is adjusting its Treasury strategy and seeking to boost its liquidity.
In addition, the company canceled a commitment to acquire new hardware by canceling a $37 million deal. Overall, Bitfarms has improved its “corporate liquidity by almost $100 million”.
As the price of bitcoin has fallen by more than 75% from its all-time high, BTC miners have been forced to react and adjust to current market conditions. This could become a hindrance for the crypto market, as the price of BTC and other large cryptocurrencies may have a new hurdle that will prevent it from reaching new highs.
However, with market sentiment reaching an extreme level of fear after a 2-year bull run, BTC miners selling their inventory could potentially signal the price of bitcoin. Despite increasing selling pressure, BTC has seen a significant reaction to the upside and may form a new price range.
As claimed in the press release, Bitfarms holds 3,349 BTC with an average daily output of 14 BTC. The company plans to use a portion of its recently acquired liquidity to pay down debt with Galaxy Digital and further reduce its leverage.
Lack of leverage, and natural supply and demand dynamics, are indicators of healthy markets with less enthusiasm. This could allow BTC price to recover and form a macro bottom as global markets turn under pressure from new economic factors.
An Industry Maturing, Can Bitcoin Miners Survive the Crypto Winter?
Unlike previous market cycles, bitcoin miners can adapt to market volatility and continue their operations. Instead of reacting to price action, BTC miners are preparing to endure the crypto winter. Jeff Lucas CFO at Bitfarms said:
Considering the extreme volatility in the markets, we continue to take actions to increase liquidity and de-leverage and strengthen our balance sheet. Specifically, we have sold 1,500 more bitcoins and are no longer hiding all of our daily BTC production.
Lucas claims that the company is bullish on the long-term price potential of BTC. However, the current market conditions require them to change their corporate strategy. Lucas said:
While we remain optimistic on long-term BTC price appreciation, this strategic change enables us to focus our top priorities on maintaining our world-class mining operations and growing our business in anticipation of improved mining economics. .
Related Reading | Celsius says maintaining financial stability will take time
At the time of writing, BTC price is trading at $21,400 with a gain of 3% over the past 24 hours.