๐จ BITCOIN MINERS GIVING UP AS PROFITS DRY UP AMID SELLOFF ๐จ
๐ก CryptoQuant analysts reveal Bitcoin miners are approaching "capitulation" as profit margins tighten post-halving and BTC hovers close to $50,000. This state mirrors the market bottom post-FTX crash in late 2022, potentially signaling a market bottom for BTC. ๐ก
๐ Signs of Capitulation ๐
๐ Miner capitulation happens when miners scale back operations or sell their mined Bitcoin to stay afloat or hedge their exposure. Over the past month, Bitcoin's price has dropped 13% from $68,791 to $59,603, intensifying signs of miner distress.
๐ One critical indicator is the significant drop in Bitcoin's hashrate, which has fallen 7.7% to a four-month low of 576 EH/s after hitting a record high on April 27. This drop mirrors a similar hashrate decline in late 2022, when Bitcoinโs price bottomed at $15,500 before surging over 300% in the following 15 months.
๐ "Bitcoin miner capitulation mirrors December 2022 levels with a 7.7% hashrate drop, similar to post-FTX collapse conditions. Such declines often signal potential market bottoms." - CryptoQuant
๐ Hashrate Analysis ๐
๐ Bitcoinโs hashrate decline indicates reduced computational power securing the network, a sign of miners shutting down rigs due to unprofitability. This pattern of miner capitulation suggests a potential market bottom, akin to previous cycles.
๐ Miner Profit/Loss Sustainability ๐
๐ธ Since the halving, miners have faced extreme underpayment, as seen in the miner profit/loss sustainability indicator. Daily revenues have plummeted 63% from $79M on March 6 to $29M, with transaction fees now only contributing 3.2% of total daily revenuesโthe lowest share since April 8.
Are we headed towards another "Crypto recession"?
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