Recent BTC Price Dip Linked To China Mining F2Pool Selling Off

Friday 05 March 2021, 2:00 PM AEST - 1 month ago

China are shutting down some of their mining operations and mining group F2Pool, who have many mining farms in China, are transferring BTC out of their wallets frantically.

China to Ban Mining Operations

As quoted by CNBC, China’s Inner Mongolia region plans to ban crypto mining and shut down existing operations by April 2021 – due to high energy consumption.

If we take a look at the some of F2Pool mining farms locations we can see they are located in the Inner Mongolia region of China – the same place as the ban.

F2Pool Mining Farms in Inner Mongolia

As China start to head towards a cleaner ecosystem, they might ban the rest of the Chinese mining locations, and that accounts for around 65% of all bitcoin mining globally – which could have a short term impact on BTC.

F2Pool BTC Outflow

If we take a look at the data in the charts provided by CryptoQuant we can clearly see the massive outflow of BTC from F2Pool affiliated wallets.

BTC: F2Pool Affiliated Miners Outflow Source

This consistent massive outflow of BTC is not “normal” for a BTC mining pool. If we compare it to the Antpool group which has 11% share of the total BTC pools, it averages around 300 BTC outflow mark every few days. F2Pool which has 18% of the share, you would expect the outflow to be only slightly bigger, but at the moment you can see, its considerably bigger.

F2Pool Affiliated Miners Outflow – zoom in showing 14,000 BTC outflow for Feb 25

That giant outflow on Feb 21 could have sparked the the BTC dip, with futures contracts being liquidated causing a domino effect.

F2Pool Affiliated Miners Outflow – zoom in showing hourly outflow vs BTC price drop

It will be interesting to see if F2Pool release something official about closing operations in China. Stay tuned for more news.

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