Bitcoin (BTC) miners are currently displaying signs of capitulation, which historically have been associated with market bottoms. This comes after the world’s largest cryptocurrency experienced a 13% decline in the past month, with Bitcoin trading at $60,300 after a 3% drop on Wednesday.
The $60,000 level has been a crucial support zone since April, with Bitcoin bouncing back three times from this region before making upward moves towards $70,000. Data from CryptoQuant indicates that a similar pattern may repeat soon, as various indicators point to miner capitulation following a period of significant selling pressure.
One of the key indicators of miner capitulation is the decline in hashrate, which represents the mining power in the Bitcoin network. Hashrate has dropped by 7.7% since the halving event, while mining revenue per hash (hashprice) is also nearing all-time lows. This decrease in mining revenue has led to miners shutting down equipment, resulting in a drop in hashrate.
According to CryptoQuant, miners have seen a substantial 63% decline in daily revenues due to the halving and the sharp decrease in transaction fees, which now account for only 3.2% of total revenue. Daily revenue for miners has fallen from $79 million on March 6 to $29 million currently.
These levels of miner capitulation are comparable to those seen in December 2022, which marked the market bottom following a significant market correction. The current situation reflects the challenges miners are facing, with reduced revenues impacting their operations and leading to adjustments in mining activities.
Despite the current difficulties faced by miners, the overall sentiment remains cautiously optimistic, as past instances of miner capitulation have often signaled a potential turning point for the market. Observers will be closely monitoring how miners navigate these challenges and how these developments may impact the broader cryptocurrency market in the near future.