Bitcoin’s recent price drop below $60,000 has significantly increased the distress for miners across the board.
During the midweek dump, chained up facts showed that MARA, a publicly traded BTC miner, moved $87 million (1,318 BTC) to centralized exchanges, possibly for a sell-off.
Source: Arkham/Lookonchain
According to Bitcoin Treasuries, the miner owned 53,250 BTC at the time of writing, making it the largest publicly traded company to own BTC after Strategy.
That said, AMBCrypto had done that before noted a surge in the sell-off by miners in January, with the daily average reaching 10,000 BTC as the price struggled below $80,000.
Now that Bitcoin’s price lower has melted, AMBCrypto evaluated the extent of the miners’ distress and whether possible relief is likely.
Bitcoin miner revenues fall to 2024 levels
Miner capitulation always occurs when the overall cost of mining BTC becomes unbearable from a business perspective. Electricity drives most of the costs, but rising network hashrate and falling BTC prices could also be catalysts.
Collectively, this shrinks miners’ revenue and overall profitability, forcing them to shut down or dump BTC.
At the time of writing, miners’ daily earnings had increased decreased to $28.3 million, the level last seen in the third quarter of 2024 – down as much as 36% year-over-year (YoY).
Source: YCharts
The freefall in miners’ incomes made it clear that the problems in the sector still persisted.
Even according to the Hash Ribbons metriccharting this capitulation, the miner crisis (shaded areas) began in late November when BTC fell below $100,000.
For possible relief, the hashrate’s 30-day MA (Moving Average, blue) always crosses above the 60-day MA (purple).
Source: BMPro
However, at the time of writing, the 30-day MA had widened further against the 60-day MA following an extended price decline below $70,000, indicating that the distress for miners is far from over.
In other words, price rebounds could attract more mining dumps, potentially capping a strong, sustainable BTC recovery. This could lead to a price drop or extensive consolidation.
Will miners put pressure on BTC?
Here it is worth pointing out that such a scenario could play out in February.
In particular, the 14-day SMA Miner Outflows, which tracks miner sell-offs, has surged over the past six days, reaching a yearly high of 10.75k BTC.
Source: CryptoQuant
This implied that the sell-off in mining companies could gain momentum and derail chances of a strong price recovery unless the benchmark eases.
Final thoughts
- MARA appeared to have sold off some of its BTC holdings amid the miners’ troubles, as the price of BTC fell below $70,000.
- BTC miner revenue fell 36% and the rising miner sell-off could keep the price in range.