Bitcoin miners are currently in a tough spot, showing signs of capitulation as the crypto market experiences a 13% decline in the past month. This could signal a potential market bottom, similar to what happened after the FTX crash in late 2022. Despite this, Bitcoin is currently trading at $60,300 after a 3% drop on Wednesday, holding strong around the critical support level of $60,000.
According to data provider CryptoQuant, two key indicators of miner capitulation are a significant decrease in hashrate and daily mining revenue. The hashrate, which represents the mining power in the Bitcoin network, has plummeted by 7.7% since the halving earlier this year. At the same time, daily revenue for miners has dropped from $79 million to $29 million, leading miners to switch off their equipment and further reduce the hashrate.
This decline in revenue is mainly attributed to the halving event and the decrease in transaction fees, which now account for only 3.2% of total miner revenue. CryptoQuant’s report highlights that miners have seen a massive 63% decline in daily revenues due to these factors, raising concerns about their profitability and sustainability in the current market conditions.
The current levels of miner capitulation are reminiscent of those seen in December 2022 after the FTX crash, indicating a potential turning point for the market. Despite the challenging environment for miners, there are expectations that Bitcoin could bounce back from the $60,000 support level and head towards the $70,000 mark once again.
Overall, the crypto market is facing a period of uncertainty and volatility, with Bitcoin miners bearing the brunt of the recent downturn. As the industry continues to evolve and adapt to changing market conditions, it will be crucial to monitor the developments in miner capitulation and their impact on the broader market. Investors and stakeholders should stay informed and vigilant in these challenging times to navigate the crypto landscape successfully.