Due to the recent downfall of Bitcoin, top mining companies have reported a loss in the second quarter. Top US mining companies like Marathon Digital Holdings, Scientific Inc, and Riot Blockchain Inc reported a loss of more than $1 billion. It is the result of a significant decline in the price of BTC. Other mining firms such as Greenidge Generation Holdings and Bitfarms Ltd also reported losses in the second quarter.
Although the recent upside movement of Bitcoin relieved the investors because the mining companies will tentatively report gains in the next quarter, they have to pay off debt and operating expenses of the last quarter. Miners may need to sell some of their Bitcoin stakes to compensate for the expenses.
Bitcoin runs on a Proof of Work consensus, which is energy intensive and needs huge investment, but the downfall of BTC forced the miners to sell their assets or mining machines. Some of the large mining groups have also taken on more debts to compensate for the expenses in the long run. For example, it is reported that Marathon has taken a $100 million term loan from Silvergate Capital Corp.
Besides that, the US Security and Exchange Commission also advised public corporations to exclude price fluctuation due to the BTC because losses are not realized until the tokens are sold.
On the other hand, the BTC funding rates have remained positive this month. It is the indicator of the periodic fee that future contract holders pay each other.
At the time of writing this post, BTC was trading around $23,929, which is an uptrend forming higher highs and higher lows. However, $30,000 is a strong resistance level for BTC, and the price may correct from that level soon. Most of the technical indicators are bullish.
Though Bollinger Bands lacks volatility, candlesticks are forming in the upper range along with bullish MACD and RSI. That means it is a good time to invest for the short term. For a more detailed analysis, you can check out our Bitcoin price forecast.
On the weekly chart, Bollinger Bands show increased volatility; RSI is at 36, which does not suggest bullish momentum for the long term. Bitcoin may be bullish for the short term, but we suggest buying for the long term only when it crosses the immediate resistance level.
BTC might fall further after hitting a range of $30K; it might hit lower lows around $10K. The overall crypto market is bullish, but it is not the ideal time for long-term investment, especially in Bitcoin.
