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September proved to be a challenging month for the Bitcoin market, with miners facing profitability issues, Bitcoin price reacting to Middle East tensions, and massive liquidation events shaking the entire crypto market. This article summarizes recent developments in Bitcoin mining profitability, price movements linked to Middle East tensions, and the impact of large-scale liquidations in the market.
Bitcoin Mining Profitability Hits Record Low in September
According to a J.P. Morgan report, Bitcoin mining profitability sharply declined in September, marking a recent record low. Analysts revealed that daily block rewards dropped by 6% compared to the previous month, contributing to the third consecutive month of falling revenue. Despite Bitcoin price slightly increasing, mining profitability revenue was further impacted by April’s Bitcoin halving event, which cut miners’ rewards by 50%.
The mining sector has grown considerably, with 14 U.S.-listed companies holding over $20 billion in market capitalization. However, increased competition and higher operational costs make it harder for smaller miners to stay profitable. Notably, major U.S. mining firms like MARA Holdings and Riot Platforms saw stock prices plunge by 36% and 54% over the year.
By TradingView - Bitcoin in a 1 month retrospective viewBitcoin Price Drop Amid Rising Middle East Tensions
Middle East tensions between Israel and Iran caused turbulence in global markets, affecting Bitcoin price as well. As the Middle East situation escalated, with Israeli Prime Minister Benjamin Netanyahu promising a response to Iranian missile attacks, investors turned to traditional safe-haven assets like gold and crude oil.
By TradingView- BTC Performance OverviewWhile Gold prices surged by 1.4% and oil prices rose by 7%, Bitcoin fell by 3.5%, raising doubts about its role as a safe-haven asset.
By TradingView - Gold (1M)Bitcoin dropped from $64,000 to $60,315 before recovering to $61,800. The sudden Bitcoin price drop led to significant liquidations, with 154,770 traders liquidated and losses amounting to $521 million. Analysts have questioned the reliability of Bitcoin price during geopolitical crises similar to the current Middle East tensions, comparing its behavior to that of risk assets like tech stocks, while gold continues to outperform in uncertain times.
By TradingView - Bitcoin vs Gold in a 1 month retrospective viewMassive Liquidations Amid Bitcoin Price Drop
Bitcoin price drop had a ripple effect across the crypto futures market, with over $450 million in bullish crypto bets liquidated within 24 hours. Bitcoin traders alone lost over $122 million in long positions, while Ethereum traders lost close to $100 million. Smaller altcoins, including memecoin PEPE, saw $85 million in these massive liquidations.
These massive liquidations occurred after Iran launched missile attacks on Israel, causing panic among investors. Nearly 86% of futures traders were betting on a bullish trend for October, as it historically favors Bitcoin. However, the sudden Bitcoin price drop marked one of the worst starts to a bullish month and led to widespread losses.
By TradingView - BTCUSD_2024-10-02 (5D)September highlighted the volatility and challenges in the Bitcoin market, from reduced mining profitability and geopolitical-triggered price drops to massive liquidations across the futures market. As Bitcoin price continues to evolve, market participants must stay vigilant of global factors that could influence its performance, particularly now the Middle East tensions suddenly affecting the market.
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