- The capitulation of Bitcoin miners could ease the selling pressure on Bitcoin from miners.
- Statistics supported the idea that Bitcoin prices would follow a bullish trajectory in the coming weeks.
Bitcoin [BTC] The miners’ capitulation continued to intensify and was comparable to that of December 2022.
Julio Morenohead of research at CryptoQuant, noted in a message on X (formerly Twitter) that the hash rate was 7.6%.
It should be noted that prices do not drop immediately as a result of this drop in hash rate.
Rather, the effects of the halving and market sentiment, as well as miners’ need for cash to upgrade their equipment and stay competitive, are some of the factors that saw Bitcoin falter from $71,000 to $60,000 in June.
The capitulation of Bitcoin miners could be good news
Source: Julio Moreno on X
The concept of Bitcoin miner capitulation is closely tied to the hash rate of the Bitcoin network. The hash rate refers to the computing power of BTC miners and at the time of writing was 537.15 EH/s.
The hash rate drawdown chart reflected a decline of 7.6%, which was similar to the decline that followed the FTX stock market collapse in November 2022 and market sentiment plummeting further in December 2022.
Source: CryptoQuant
A look at the miners’ profit/loss sustainability chart showed that miners were being paid extremely high wages in early June.
Two weeks later, they were extremely underpaid as Bitcoin prices had fallen 16.2% during that period.
At the time of writing, the sustainability metric was moving from extremely underpaid to fairly paid.
The move of this metric into underpaid territory does not immediately imply a local bottom, but does outline that miners may choose to wait for better prices before selling.
How heavy has the outflow of miners been in recent weeks?
Source: CryptoQuant
The Miners’ Position Index uses the 365-day moving average of miners’ USD outflows in addition to current outflows to calculate a ratio.
The trend of the ratio reveals the behavior of miners and whether they are sending more or less Bitcoin to exchanges.
Read Bitcoin’s [BTC] Price forecast 2024-25
The data showed that miner outflows were high in February and March, declined slightly in April and May, and were quite moderate in June. This means miners are sending fewer coins than normal to exchanges.
Overall, the drop in hash rate reinforces the idea of miner capitulation. The MPI findings show that miners liquidated less Bitcoin than normal, which was also a bullish sign in the long term.