The decline in Bitcoin hashrate, an indicator that measures the relative decrease in computing power of the Bitcoin network, has dropped to levels not seen since December 2022 – shortly after the collapse of FTX during the market bottom. previous bear market.

According to data from CryptoQuant, the True Bitcoin Hashrate Drawdown currently stands at -7.6%, indicating a possible price bottom for this leading asset.

The case for a market bottom is supported by other indicators such as Bitcoin Exchange Reserves, MPI (Miner Position Index) and Bitcoin Miner Reserves, which all show low selling pressure.

The chart shows hashrate decline from December 2022 to present. Source: CryptoQuant

Miner capitulation and the current cycle

Over the past few weeks, several indicators suggest that miners are starting to capitulate, creating a potential buying opportunity for Bitcoin.

At the beginning of June, Charles Edwards, founder of crypto hedge fund Capriole, argued that the Bitcoin Hash Ribbons indicator developed by his company was sending a buy signal, reflecting a relative slowdown in network computing power.

Hash Ribbons measures a network's hashrate by comparing a 60-day moving average of Bitcoin hashrate to a 30-day average. When the 30-day average falls below the 60-day average, this indicates a relative decrease in hash power.

Hash Ribbons Indicator | Source: Capriole

Market analyst Will Woo concurred with Edwards by explaining that the market will not reach new highs until weak miners are forced to shut down operations – a phenomenon that traditionally occurs in the weeks following a crash. halving event but seems to be lingering in the current cycle.

More recently, Bitcoin miner withdrawals dropped by 90% post-halving, suggesting that selling pressure from miners has been minimized and Bitcoin prices will continue to rise.

Reality after halving and Bitcoin mining business

While preparing for the halving event in April 2024, financial services company Cantor Fitzgerald released a report highlighting the challenges miners will face following the block reward reduction.

This report identified 11 miners, including Marathon Digital, Hut8 and Argo Blockchain, that are at risk of becoming unprofitable due to high mining costs and lower rewards.

According to that report, if Bitcoin's market price drops to $40,000, some of the world's largest miners will be forced to capitulate, highlighting the predicament of the mining industry post-halving.

*Bitcoin Exchange Reserves are the total amount of Bitcoin on exchanges, increasing when more people are willing to sell and decreasing when more people withdraw for long-term holding. Miner Position Index (MPI) is the ratio of Bitcoin that miners sell to hold, MPI is high when miners sell a lot and low when miners hold a lot. Bitcoin Miner Reserves are the total amount of Bitcoin held by miners, increasing when miners hold and decreasing when miners sell; These metrics provide insight into miner and investor behavior.

Source: https://tapchibitcoin.io/su-suy-giam-hashrate-bitcoin-dat-muc-tuong-tu-thang-12-nam-2022.html