Bitcoin Miner Sell-Offs Mirror Past Patterns, Hinting at Potential Rebound
Bitcoin miners are under significant financial strain, particularly after the recent fourth halving event.
To manage rising operational costs, many miners are selling their BTC holdings.
Recent on-chain data indicates a wave of miner capitulation similar to what was seen in December 2022, shortly after the FTX collapse. This raises questions about potential impacts on the current market cycle.
Julio Moreno, CryptoQuant’s head of research, noted that Bitcoin miner capitulation levels now match those of December 2022, which marked the bottom of the previous cycle following FTX’s downfall. The collapse led to widespread panic and sell-offs, significantly dropping Bitcoin’s price.
#Bitcoin miner capitulation has reached levels comparable to December 2022: 7.6% drawdown.
December 2022 marked the cycle bottom after the FTX colapse. pic.twitter.com/8A3p2XDvXW
— Julio Moreno (@jjcmoreno) June 28, 2024
At that time, miner capitulation included a 7.6% drop in the Network True Hashrate. Currently, the Network True Hashrate Drawdown is also at -7.6%.
READ MORE: Peter Schiff Criticizes Bitcoin’s Q2 Performance Compared to Gold
This metric reflects the reduced computational power for mining Bitcoin, indicating financial struggles for miners.
Such significant drawdowns often lead to increased selling pressure, potentially driving Bitcoin’s price lower. However, historical patterns show that significant miner capitulation can precede market recoveries. In December 2022, similar conditions marked the cycle bottom, suggesting that Bitcoin might be poised for a rebound.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
