- Bitcoin Total costs are a lowest point in 12 years and weigh heavily on the profitability of the miner.
- Puell Multiple at 1.2 proposed miners earn 20% above long -term averages.
With Bitcoin [BTC] Both almost $ 107K, both short-term and long-term holders remain comfortable profit.
But miners? They grind through one of their most difficult cycles in more than ten years.
3 Reasons why Bitcoin -My workers take up low profit
According to AlfractalThere are three important reasons why the profitability of the miner is historically low.
To begin with, the total reimbursements paid on the Bitcoin network have been paid at their lowest level since 2012. At a layer of 12 years, this decrease in reimbursements is mainly powered by the low on-chain activity this cycle.
Source: Alfractaal
When the activity on the chains of a network decreases, this means a reduced income for miners, as is currently observed in the market.
At the same time, the hash rate has fallen, but the difficulty is not. That is unusual.
Source: Alfractaal
The network has not yet adapted and presses a tighter pinch in the margins. This is probably caused by large mining activities that take out ASIC machines with falling income and a low network demand.
Usually a high hash speed volatility is a red flag for network inconsistency and miner contractiveness. As a result, miners see a downward difficulty adjustment in which ineffective miners are forced from the market.
Source: Alfractaal
Bitcoin -my workers still not sell
Interesting is that although mining activities are a challenge, miners did not start selling.
Source: Cryptuquant
According to Cryptoquant data, the miner current to exchange fell to a monthly low of 795.5 BTC from 29 June. That is a clear indication that miners retain even while they are under water.
That said, which is remarkable, is a dramatic shift of earlier cycles.
During the previous cycles, miners then sold prices and during periods of high blockchain activity. This time they remain placed despite high BTC prices and low network activity.
So … why don’t they sell?
It comes down to one thing: no strong reason.
Source: Checkonchain
Although the profit drops, miners still deserve enough to float. The Puell Multiple was 1.2, which means that miners are 20% above historical averages, despite poor market conditions.
Price pressure on BTC?
Reduced sales by important market players, such as miners, is undoubtedly a precursor of higher prices. When this group stops sales, it facilitates the downward pressure on BTC, creating a more stable environment for further growth.
Therefore, if miners keep holding their bitcoin, regardless of the challenging mining conditions, this draws up BTC for further profit. That said, if these circumstances persist, BTC will try to break out from its current consolidation and to focus on $ 109,000.
However, if miners find stimuli to sell, this will result in a higher sales pressure, causing downward pressure on BTC.
In that case, a breakdown of the recent upward trend will take place, leading to a retracement of up to $ 104,000.