According to TechFlow, market intelligence company CryptoQuant reported that the BTC miner capitulation indicator is close to the market bottom level after the FTX crash in 2022, which may indicate the arrival of the BTC market bottom. Miner capitulation refers to some miners reducing operations or selling mined BTC to make a living or hedge risks. In the past month, the BTC price fell from $68,791 to $59,603, during which time multiple signs of capitulation appeared.
One sign of this is the significant decline in BTC hashrate – total computing power dropped 7.7% to a four-month low of 576 EH/s. CryptoQuant analysts note that this is similar to what happened in late 2022 when BTC prices bottomed out at $15,500, before BTC rose more than 300% over the next 15 months.
In addition, miner revenue has dropped significantly since the halving, with daily revenue down 63% from $79M on March 6 to $29M currently, and transaction fee revenue has dropped to 3.2%, the lowest since April 8. Miners are forced to use their reserves to generate revenue, with daily miner outflows at their highest since May 21, indicating they may be selling BTC reserves.
The combination of selling by miners, whales, and national governments has caused BTC prices to retreat, falling to a four-month low of $53,499 on July 5. The BTC hash price (miner profitability per unit of computing power) is currently $0.049 EH/s, close to the all-time low of $0.045 on May 1.
Financial services firm Cantor Fitzgerald reported earlier that if the BTC market price drops to $40,000, some of the world’s largest mining companies will be forced to capitulate, highlighting the plight of the mining industry.
