The post Assessing if Bitcoin miners are close to capitulation or not appeared on BitcoinEthereumNews.com.

Bitcoin has fallen by 11.28% from its ATH, reducing miners profitability Miners could capitulate as profit/loss sustainability enters extremely underpaid zone Since hitting a new all-time high of $109k nearly 3 weeks ago, Bitcoin [BTC] has dropped by approximately 11.28% on the charts. This decline has not only affected short-term holders in terms of profitability, but also miners. In fact, the latest dip in BTC’s price charts has left miners struggling to keep up with the market. CryptoQuant analyst Frost, for instance, observed that miners are extremely underpaid right now, risking miners’ capitulation. Bitcoin’s Miner Profit/Loss enters extreme underpaid zone According to CryptoQuant, Bitcoin miners’ profit-loss sustainability has entered the extremely underpaid zone. Source: CryptoQuant This, following the April 2024 halving which resulted in a rising mining difficulty. While it has become more difficult to mine, Bitcoin’s hash rate has continued to grow – A sign of the surge in competition among miners. Source: CryptoQuant With Bitcoin continuing to decline since hitting its ATH, miners’ returns have been shrinking. On the contrary, the realized mining cost has been relatively high, compared to the last difficulty bottom. This market condition suggests that miners might start to capitulate soon. Historically, when miner profit/loss profitability turns negative, it is often followed by a mid-term positive price reaction. Simply put, miners have reacted by selling Bitcoin to cover costs. Source: CryptoQuant With miners actively selling, the miner-to-exchange flows hit record levels too, indicating that miners are selling heavily at the moment. We can also see this as the miners’ netflow total turned positive after being negative for 5 consecutive days. This seemed to imply that more miners are sending their BTC tokens to exchanges to sell. Source: CryptoQuant With miners facing operational difficulties, they have responded by selling. Some could even be forced to…

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Filed under: News - @ February 8, 2025 12:12 am