The million dollar question, will the upcoming bitcoin halving (increased difficulty) cause some miners to capitulate before or after the halving. No doubt, that smaller miners will be taken out. When small miners gets taken out, they will dump their coins.Will there be enough demand to absorb the supply? Will there be enough retail demand to absorb the incoming supply?
Every halving event, smaller miners get taken out. Same cost to mine, half the reward in coins. The market price of bitcoin has to increase by 2x for miners to break even. If Bitcoin market price fails to keep up with cost of production. Smaller Miners will exit-dump their coins before or after the halving. The increased difficulty will force many smaller miners to upgrade or expand their mining capabilities. Some can afford it, some can’t. When miners dump, market must absorb the hits, meaning when a group of smaller miners want to sell of 10,000-20,000 bitcoins. you need xxxx amount of buyers to buy those 10,000-20,000 bitcoins at the same price level or price will tank and break support.
On average 1800 bitcoins are mined per day, right now. How much is attributed to smaller miners. I don’t know.
Smart money isn’t buying the dip…. they will let it dump to cost of production then scoop it up. And it’s hard to put a $ on cost of production, due to difficulty adjustment. It could be $5xxx. I am just guessing. I am just saying that Halving doesn’t mean bull-run. The market works by supply and demand principles. For every seller, there must be a matching buyer.