Bitcoin's price has seen a significant drop, falling by 11.28% from its all-time high, affecting not just short-term holders but also miners' profitability.
Miners’ Struggle
Miners are grappling with maintaining profitability amid the drop in Bitcoin's price. Analysts note that miners are severely underpaid, risking potential capitulation.
Increasing Mining Difficulty
This follows the April 2024 halving, which increased mining difficulty. Despite this, Bitcoin's hash rate has grown, indicating increased competition. As Bitcoin's price declines, miners' returns decrease while realized costs remain high.
Potential Miner Capitulation
With miners' profitability dropping, it's crucial to determine if capitulation is imminent. The Puell multiple has stayed above 1 since January 13, indicating miner revenue remains moderately healthy. As long as it stays above 1, capitulation is less likely.
For miners to avoid capitulation, Bitcoin must recover and hold above $100k to ensure miners' sustainability goals are met.
