- Miners’ capitulation has yet to happen despite BTC’s recent poor price performance.
- However, they have continued to take profits.
In a recent one reportnoted pseudonymous CryptoQuant analyst Yonsei Dent, despite Bitcoin’s [BTC] price drop after approval of the Exchange Traded Fund (ETF), the capitulation of miners has yet to begin.
Dent looked at BTC’s Hash Ribbon metric – which identifies market trends and miner behavior by tracking the Hash moving averages of the hashrate (30DMA and 60DMA) – and found that the indicator hasn’t signaled a death cross, even with the poor performance of the currency since ETFs became tradable. .
A death cross occurs when the shorter-term moving average (30DMA) of the Hash Ribbon falls below the longer-term moving average (60DMA). This signals a decline in mining activity and indicates that miners may see low profitability.
Furthermore, Dent assessed BTC’s Miner’s Position Index (MPI) and found that in the current market, miner capitulation does not appear to be occurring at the levels of previous bear market lows. BTC’s MPI measures the historical pattern of miners’ selling behavior during market downturns.
According to Dent:
“Examining the selling of miner capitulation at an MPI index level of 4.0 during previous bear market lows and lows, it becomes clear that this adjustment does not represent the rise of miner capitulation.”
No capitulation yet, but miners have sold some coins
As Dent noted, “miners sold significant amounts of BTC in January 2024.” The analyst noted that this could be a “proactive step to prepare for future halving events.”
According to data from CryptoQuantBTC Miner Reserve measured on a 30DMA is down 1% this year. This metric measures the number of coins held in the wallets of affiliated miners. Its decline often signals a rally in coin sell-offs among network miners.
Source: CryptoQuant
Likewise, the coin’s Miner to Exchange Flow, measured over the same period, has registered a growth of 45%. This indicator measures the amount of BTC flowing from miners to exchanges.
Read Bitcoin’s [BTC] Price forecast 2024-25
When it rises, it means miners are selling more BTC than they are mining for profit.
Still facing significant resistance at the $43,000 price level, BTC was exchanging hands at $42,085 at the time of writing. According to data from CoinMarketCapthe value of the currency has risen by 5% in the past week.