Ethereum News; China’s crackdown on cryptocurrency miners is affecting not only the Bitcoin network, but also Ethereum. According to Etherscan data, the hash rate of Ethereum mining, which peaked at 643.805.8731 GH/s on May 20, 2021, is rapidly decreasing. The hash rate is stable at 493,929.6709 GH/s after a massive drop to 21,397,4621 in two days.
It works based on the existing functional Ethereum blockchain Proof of Work (PoW) consensus system. Like Bitcoin, miners on the Ethereum network must verify processes by completing a series of computational puzzles to record processes within a block. Mining machines like Bitmain’s Antminers are used for these moves. The fact that miners began to leave China has seriously disrupted the mining ecosystem and hash rate.
As can be seen in the chart, Ethereum’s mining hashrate has been on a steady rise since December 2019. While moderate outages could be observed in the following months, a sharper rise began in the third quarter of 2020. The reason for this sharp rise is that Ethereum started to attract great attention from individual and institutional investors.
After the declining hashrate on the Ethereum blockchain, there may be a drop in price. The world’s second-largest cryptocurrency has started a widespread bearish movement since May 12. On the contrary, the reversal of this price came after the all-time high of $4,300 was reached and coincided with the same time. -With the period when the hash rate reaches its peak.-
According to analysts, although China has disrupted the mining ecosystem, a return to normal could push prices back into an uptrend as miners look for alternatives elsewhere. Currently the MACD indicator is below the signal line, which says the downtrend is far from complete in the short term. A fundamental change or resumption of large-scale mining can trigger technical indicators to monitor price increases in the medium to long term.