Several signs of capitulation have been identified by experts at CryptoQuant. Following the halving, miners have consistently been undercompensated. CryptoQuant, a market intelligence firm, suggests that Bitcoin miner capitulation metrics are nearing a market bottom post the FTX crisis in late 2022, hinting at a potential turning point for BTC.
In response to the challenging environment, some miners are opting to scale back operations or liquidate portions of their Bitcoin holdings—a practice known as “miner capitulation”—either to ensure survival or to manage their Bitcoin exposure for yield or hedging purposes.
The Struggle of Miners Persists
CryptoQuant’s experts have highlighted several signs of capitulation in recent weeks, coinciding with Bitcoin’s price drop from $68,791 to $59,603, a decline of 13%. One significant indicator is the plummeting hashrate, the total computing power securing the Bitcoin network, which fell from its peak on April 27 to a four-month low of 576 EH/s, marking a 7.7% decrease.
This 7.7% decline mirrors a similar drop in hashrate observed in late 2022 when Bitcoin’s price hit a low of $15,500 before staging a remarkable 15-month rally of nearly 300%.
According to CryptoQuant’s analysis, miners have been consistently “extremely underpaid” since the halving, supported by the miner profit/loss sustainability index. Consequently, Bitcoin miners’ daily income has plummeted by 63% since the halving, when transaction fees and basic block rewards were more lucrative.
Facing diminishing profits, Bitcoin miners are now turning to yield strategies. CryptoQuant reports that daily miner withdrawal volumes have surged to their highest levels since May 21, indicating potential large-scale sell-offs of Bitcoin holdings by miners.
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