Bitcoin Miner Capitulation Signals Potential Market Bottom

Market intelligence company CryptoQuant has identified various signs of miner capitulation following the FTX crisis in late 2022, indicating a probable market bottom for BTC. This suggests that miners, facing the aftermath of the halving, are experiencing significant financial pressures.

Heightened Miner Struggles

Recent observations by CryptoQuant experts have highlighted the challenges faced by miners as BTC prices dropped 13%, declining from $68,791 to $59,603. Notably, Bitcoin's hashrate, a crucial measure of the network's computing power, plummeted from its peak on April 27 to a four-month low of 576 EH/s, marking a substantial 7.7% decrease.

This decline in hashrate is reminiscent of a similar occurrence in late 2020 when BTC prices hit a low of $15,500, followed by a remarkable 300% surge over 15 months. The analysis further reveals that miners have been notably undervalued since the halving, with the miner profit/loss sustainability index indicating a 63% drop in daily incomes compared to the pre-halving period.

Facing diminishing profits, miners are seeking alternative avenues to preserve their earnings, with a surge in daily withdrawals recorded—the highest level since May 21. This trend could imply that miners are liquidating their Bitcoin holdings, aiming to hedge against financial uncertainties.