Bitcoin miners ‘near capitulation’ as profits dry up alongside BTC sell-off

According to market intelligence firm CryptoQuant, Bitcoin miner capitulation metrics are approaching the same level as the market bottom following the FTX crash in late 2022, signaling a possible bottom for BTC.

Miner capitulation is a process in which some miners reduce their operations or sell a portion of their mined Bitcoin and reserves to stay afloat or” earn yield or hedge their Bitcoin exposure.”

CryptoQuant analysts highlighted multiple signs of capitulation that emerged over the last month, during which time Bitcoin’s price dropped 13% from $68,791 to $59,603.

One of those signs is a significant decline in Bitcoin’s hashrate – the total computational power that secures the Bitcoin network – which has experienced a 7.7% decline to hit a four-month low of 576 EH/s after hitting a record-high hashrate on April 27.

“Bitcoin Miner capitulation mirrors December 2022 levels with a 7.7% hashrate drop, similar to post-FTX collapse conditions. Such declines often signal potential market bottoms.”Bitcoin mining hashrate. Source: CryptoQuant

Notably, the 7.7% drawdown mirrors an equivalent decline in hashrate in late 2022, when Bitcoin’s price bottomed at $15,500 before surging more than 300% over the next 15 months.

The CryptoQuant report also noted that for most of the period since the halving, miners have been “extremely underpaid,” as evidenced by the miner profit/loss sustainability indicator.

Bitcoin miner profit/loss sustainability. Source: CryptoQuant

As a result, miners have seen a 63% decline in daily revenues since the halving when both Bitcoin’s base block rewards and transaction fee revenue were higher.

“Total daily revenues have decreased from $79M on March 6 to $29M currently. Moreover, the revenue from transaction fees has fallen to only 3.2% of the total daily revenues, the lowest share since April 8.”

Related: Up to 99% of Mt. Gox’s $8.2B Bitcoin could be sold — Analyst

Due to decreased revenues, Bitcoin miners have been forced to use their reserves to earn yield. CryptoQuant noted that daily miner outflows have spiked to the highest volume since May 21, suggesting they…



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