Why do we often see Bitcoin in the 4-digit range🧵? Historically, during bear markets, Bitcoin has always fallen below (at least temporarily) the miner survival threshold. In the 2018 bear market bottom: Bitcoin's price dropped to around $3,200 by the end of that year. At that time, the estimated average mining cost across the network was between $4,000 and $5,000. This means that at the bottom, the market indeed broke through most miners' survival line, leading to the closure of many small and medium-sized mining farms, and a rare continuous decline in hashrate.

In March 2020, the "312" event: the price instantly halved to below $4,000. At that point, the price was well below the profitability break-even point for mainstream mining machines (like the S17), causing a short-term shutdown wave of the entire network's hash power.

In 2022, during the FTX crisis: Bitcoin dropped to around $16,000. Market research at that time showed that even more efficient miners' total costs (including financial leverage) were around $18,000 to $20,000. The Bitcoin system ensures its survival through "difficulty adjustment." If the price doesn't fall below production costs, inefficient capacity won't exit, and network difficulty won't decrease.

The clearing process: Price drops -> Falls below average cost -> Inefficient miners shut down -> Total network hash rate decreases -> Difficulty adjusts downward -> Remaining efficient miners' costs decrease.

Currently, the most dominant high-efficiency mining machines (S21 series) have shutdown price points at a $0.04 electricity rate, ranging between $38,000 and $41,000.