Expect Further BTC Decline Until Weak Hands Capitulate and Hashrate Rebounds

Bitcoin has been in a downtrend for over two weeks, now trading 13.8% below its all-time high of $73,835, reached on March 14. Analysts believe that Bitcoin needs to recover its hashrate and shake off "weak hands" to end the downtrend.

Independent analyst Willy Woo noted that Bitcoin's price would only recover when "weak miners die" and the hashrate rebounds. In a June 21 post on X, Woo stated, "This one is for the record books as it's taking a lot of time for miner capitulation post-halving."

Miner capitulation theory suggests that miners will shut down their hardware and sell their coins if Bitcoin falls below a profitable price. When Bitcoin "sheds weak hands," it means inefficient miners with outdated hardware and high costs go bankrupt, while others upgrade to more efficient hardware due to halved revenues. This forces miners to sell their BTC to cover losses or hardware upgrades. After this phase, only strong miners remain, holding out for higher prices.

Woo added that capitulation is taking longer during this cycle, possibly due to profit boosts from ordinal inscriptions. He shared a graph showing that the current hashrate recovery is slower than in previous cycles, taking 61 days so far compared to 24 days in 2017 and 8 days in 2020.

Bitcoin hashrate refers to the number of attempts made per second to solve the mathematical puzzle validating Bitcoin transactions. A higher hashrate means more computing power is used, increasing energy costs and extending transaction times.

Fellow analyst Ali Martinez declared in a June 15 post on X, "Bitcoin’s average mining cost is currently at $86,668.

Historically, $BTC always surges above its average mining cost!"

Another analyst, Mr. Anderson, explained in a June 18 X post that Bitcoin's downtrend will end with a "shake out," where a sharp price drop causes less committed traders to sell, triggering panic and increased selling. After weaker traders exit, the price often stabilizes or rebounds as stronger traders buy at lower prices.