- Bitcoin’s capitulation has been relatively low for the past five years.
- Rising difficulty and hash rates can increase selling pressure on miners.
Bitcoin price last week[BTC] fell below the $30,000 mark, creating uncertainty in the market. Many speculators believe that if the price of BTC falls further, it could affect various sectors of the crypto industry, especially miners.
Read the Bitcoin price forecast for 2023-2024
Bitcoin mining – A profitable venture?
However, recent data indicated that miner capitulation has been relatively low over the past 5 years. Miner capitulation refers to the act of Bitcoin miners stopping or reducing their mining activities due to adverse market conditions, usually caused by declining Bitcoin prices or increased mining problems.
A shorter miner capitulation suggests that compared to previous years, miners have been relatively resilient and have continued their mining operations despite potential challenges in the Bitcoin mining ecosystem.
Source: glasnode
However, things could get worse for miners in the future and selling pressure could increase. One of the reasons for the increasing selling pressure on Bitcoin would be the increasing difficulty for miners. The increase in mining difficulty increases the effort required to mine new bitcoins.
Miners may face higher operational costs and lower mining rewards. To cover costs, some miners may be forced to sell more of their mined bitcoins. This increased sales activity may lead to increased selling pressure in the market.
The cumulative effect of multiple miner sales may contribute to a downward price movement for Bitcoin.
Source: Blockchain.com
Moreover, the rising hashrate could also contribute to increased selling pressure for miners.
As the hashrate increases, the competition between miners increases. To stay competitive, miners invest in more powerful equipment, which creates financial pressure. To cover these costs, miners may need to sell more of their mined coins. This increased sales activity can lead to increased selling pressure in the market.
Source: Blockchain.com
Due to these factors, miners’ earnings dropped significantly. It has yet to be determined whether these miners will capitulate or continue to show confidence in BTC.
Source: Blockchain.com
Is your wallet green? Check out the Bitcoin Profit Calculator
While Bitcoin miners’ hopes are uncertain, retail investors remain optimistic. According to recent data from Glassnode, the number of addresses holding more than 0.011 BTC has reached an all-time high.
Source: glasnode