There are signs of Bitcoin miner capitulation, which could indicate a bottom in Bitcoin prices, according to a report by CryptoQuant.
Miner capitulation is when some miners halt operations or liquidate portions of their Bitcoin reserves, typically due to unsustainable financial pressures. Historically, this process has often coincided with significant price bottoms for Bitcoin.
The CryptoQuant report highlights a noticeable decline in the Bitcoin network’s hashrate following the recent halving event. The hashrate, which measures the total computational power used to mine Bitcoin, has dropped by 7.7%.
This is the most substantial decline since December 2022, a period marked by the collapse of the FTX exchange and the associated Bitcoin cycle bottom. A falling hashrate indicates that some miners are shutting down their operations due to reduced profitability.
Bitcoin miners are currently experiencing significant financial strain, said CryptoQuant. The combination of lower Bitcoin prices, reduced block rewards post-halving, and a collapse in transaction fees has led to miners being extremely underpaid. This financial pressure forces miners to consider shutting down their operations or selling their Bitcoin holdings to cover costs.
Bitcoin miner reserves have reached their lowest level in more than 14 years, falling to 1.90 million BTC as of June 19, 2024, according to data from CryptoQuant. This significant decline marks the lowest point since February 2010, reflecting a trend where miners hold less Bitcoin on their balance sheets.
As profitability declines, miners have been moving Bitcoin out of their wallets at an accelerated pace. Daily miner outflows have surged to their highest levels since May 21.
This trend suggests that
Read more on cryptonews.com