Data shows that Bitcoin (BTC) miner withdrawals have fallen by nearly 90% since the block subsidy was halved.
CryptoQuant, an on-chain analytics platform, suggested in a Quicktake post on June 28 that selling pressure from miners is “weakening.”
CryptoQuant: Bitcoin Miner Withdrawals “Drastically Decline”
Bitcoin miners have had months to adjust to a new economic reality following the April halving, which saw their subsidy per block mined slashed by 50%.
Network fundamentals reflected the reorganization, with both hash rate and mining difficulty falling from all-time highs.
“After the Bitcoin halving, mining rewards were cut in half, so older model mining rigs were no longer cost-effective and fell into disuse,” explained CryptoQuant contributor Crypto Dan.
“As a result, mining activity declined, and miners began selling Bitcoin in OTC transactions to cover the costs of their mining operations.”
In fact, the hash rate reflects the state of “surrender” among miners, according to the popular Hash Ribbons indicator. The 30-day moving average hash rate is lower than the 60-day benchmark.
That in itself is traditionally considered a buy signal by Bitcoin traders, but Crypto Dan is already seeing that process coming to a halt.
“The market currently appears to be in the process of digesting this sell-off, and fortunately, the amount and volume of bitcoins being moved out of wallets by miners has been decreasing rapidly recently,” he added.
“In other words, if miners’ selling pressure weakens and all selling volume is absorbed, a situation may be created where an upward rally can continue again.”
According to accompanying CryptoQuant data, the largest number of known withdrawals from miner wallets was more than 53,000 on April 10, nine days before the halving.
Since then, that number has fallen 85% to about 8,000 as of June 27.
The post concluded, “We expect positive movement in the cryptocurrency market in Q3 2024.”
Hash prices have increased concerns for small-scale BTC miners.
As Cointelegraph reported, the decline in hash prices has led to smaller profit margins for small miners.
Related: Bitcoin Mayer Multiple Hits Last Low with $30K BTC Price
Between June 8 and June 24 alone, hash prices, which reflect the expected return per exahash, fell by 50%.
As of June 28, the hash price was $0.048, according to data from the monitoring resource Hashrate Index.
Jan Wuestenfeld, a Bitcoin economist and mining expert, responded to
“After the halving, the hashrate started to decline (and partially stopped after the price increase). But the current price correction further reduces miners’ profits.”
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