Willy Woo has presented arguments to support the argument that a power outage in Xinjiang, China, is related to the weekend Bitcoin price crash.
Power Outage in Xinjiang Potentially Linked to BTC Crash
On-chain analyst Willy Woo has pegged the recent Bitcoin crash to power outages in Xinjiang, China, the province that accounts for close to one-quarter of the global hashrate based on information by the Cambridge Bitcoin Energy Consumption Index.
Delving into the details, Woo has been able to connect recent flooding in a local coal mine that trapped 21 miners underground with the slump in Bitcoin price that followed. According to Woo, the events are connected.
The analyst noted that 9,000 BTC were sent to Binance on April 16 and stipulated that someone with knowledge of what was going on in China must have carried out the transaction.
Ensuing events triggered $4.9 billion in Bitcoin liquidation with $4.4 billion in margin calls across the altcoin market. While Woo’s opinion seems well-founded, he naturally found a few opposite views with Adam Cochran from Cinneanhaim Ventures.
Fair Game or “Utter Nonsense”
Essentially, Cochran said that there is no link between hash-rate and Bitcoin’s price drop. Meanwhile, the convenient drop in price has prompted renewed interest in purchasing the currency as late investors have realized that this is an opportunity to jump in on the action.
Cochran didn’t mince his words regarding the nature of Woo’s analysis, bluntly stating: “The idea that a power outage last night in a mining region in China led to the dip in $BTC is utter nonsense, just like the spurious correlation graphs above.”
China still plays an important part in the Bitcoin ecosystem, and its sustainability as the country accounts for two-thirds of the global mining power. Chinese online gambling operator 500.com has made a series of investments in Bitcoin mining equipment over the past several months, and most recently in February.
Bitcoin is currently trading at $56,355.27. The currency is up 2.38% in the last 24 hours and down 6.39% in the last seven days. Bitcoin’s market cap remains above $1 trillion.