Chinese regulatory crackdown forces 400,000 Bitcoin miners offline in Xinjiang province, causing network hashrate to plunge 8% and pushing BTC below critical $86,000 support levels amid mounting sell pressure.
Bitcoin faces critical pressure as Chinese regulatory actions trigger massive mining facility closures across Xinjiang province. The digital asset recently tested the $85,000-$86,000 support zone amid heightened market volatility.
Mining operations involving up to 500,000 rigs have been impacted across several provinces, with the network hashrate dropping more than 5.6% following December 13 shutdowns. This represents the steepest decline in mining activity since the April 2024 halving event.
According to TedPillows on X, $BTC currently retests its $85,000-$86,000 support zone. The trader warned that losing this level could trigger a revisit to November lows.
400,000 Miners Offline: Xinjiang Crackdown Explained
The current crisis stems from renewed Chinese Communist Party scrutiny of domestic Bitcoin mining operations. According to NoLimitGains on X, China tightened regulations on domestic Bitcoin mining, forcing roughly 400,000 miners offline in Xinjiang alone during a brief December window.
The hashrate decline happened quickly. Chinese Bitcoin mining farms started closing operations in the Xinjiang autonomous region, with facilities operating on renewable energy not receiving exemptions .
NoLimitGains explained on X that when miners face forced shutdowns, several consequences emerge rapidly. They lose revenue immediately and need cash to cover operational costs or relocation expenses. Some face pressure to sell BTC into the market, while uncertainty spikes across the short term.
This creates genuine sell pressure rather than demand-driven movements. The trader emphasized this development represents a temporary supply shock caused by policy decisions rather than fundamental demand issues.
Increased online promotions by Chinese miners on platforms like TikTok and Rednote drew attention from regulators, prompting rapid facility closures and on-site equipment inspections.
Wave Structure Points To Further Downside Risk
Technical perspectives suggest additional volatility ahead. According to Morecryptoonl on X, $BTC price now sits in the micro support region for wave B of iv. The structure would still favor one more extension higher. However, breaking below $83,180 would signal that wave v to the downside has already begun unfolding.
The 30-day simple moving average hashrate dropped from approximately 1.1 zettahash per second to just above 1 ZH/s. This marks the largest decline since the April 2024 halving.
Chinese facilities included both legacy sites and newly built data centers, with some operations using latest-generation rigs before halting work due to oversight fears.
Market participants observe that Bitcoin price movement correlates with hashrate declines. The downward momentum pushed prices near $85,700 before temporary stabilization occurred.
China currently hosts about 1,362 BTC nodes, representing 2.5% of the total network. Its mining pools previously ranked among global leaders. As of October 2025, China accounted for approximately 14% of global Bitcoin mining capacity, making it the third-largest mining country.
The regulatory pressure follows a pattern China established during previous crackdowns. Authorities cite concerns over financial risks, capital outflows, and electricity consumption required for mining operations.
NoLimitGains on X noted calling the exact bottom at $16k three years ago and the top at $126k. The trader maintains a long-term bullish stance despite short-term pain expectations, stating "long term this doesn't even matter." Investigators began reviewing on-site operations after promotional videos appeared online, with local operators starting facility closures in response.
Trading data reveals elevated volumes on exchanges during downside moves rather than rebounds. This suggests distribution activity concentrates during price declines. Market participants raise possibilities that Chinese miners liquidate Bitcoin reserves to fund operational exits and equipment relocations.
Mining difficulty currently projects a 3% decline, offering temporary revenue relief to remaining miners. The metric stands at 148.2 trillion, just below all-time highs.
The crypto market watches whether Bitcoin maintains support above $83,000 or faces deeper corrections toward November price levels. Technical analysts monitor wave structures for confirmation of directional bias.
Provinces like Xinjiang and Sichuan offer surplus energy suitable for mining operations. Many inland Chinese regions produce more electricity than can efficiently transmit to coastal cities. Using low-cost or stranded electricity to run mining machines became profitable before recent regulatory actions.
The current situation demonstrates Bitcoin network resilience despite geographic mining shifts. Previous Chinese crackdowns in 2021 triggered similar hashrate drops and price volatility before network adjustments restored equilibrium.
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China Shuts 400K Bitcoin Miners, BTC Tests $86K
Bitcoin crashes below $86K as China forces 400,000 miners offline in Xinjiang. Network hashrate drops 8%, triggering massive sell pressure and volatility.