Bitcoin Miners Sells BTC Struggle Amid Price Drop and Rising Difficulty
Bitcoin miners are facing challenges as Bitcoin's price drops and mining difficulty increases. Recent data from CryptoQuant shows a peak in Bitcoin outflows from miners, reaching 19,000 BTC per day earlier this month, the highest since March 2024.
The April halving event significantly reduced mining rewards, making it harder to mint coins profitably. With Bitcoin's price falling below $50,000 on August 5, miners are selling more to cover rising costs. CryptoQuant reported that miners' average operating profit has dropped to 25%, a level not seen since January 2024.
Despite cash inflows from Bitcoin ETFs, the digital asset's price has struggled since its March high of nearly $74,000. Currently trading at $61,000, Bitcoin's increased mining difficulty is a major factor. The difficulty hit a record high, requiring more computing power and energy.
Bitcoin mining typically uses vast warehouses of powerful computers. Miners receive Bitcoin as a reward, but the halving event cut these rewards in half, making it challenging to cover costs with lower prices. However, there might be a silver lining. CryptoQuant suggests that miner capitulation often occurs near local price bottoms during bull markets, indicating potential recovery ahead.
