from Bitcoin Bitcoin
-4.70%
Since the recent halving event on April 19, which halved the reward for mining a new Bitcoin block, the world’s largest cryptocurrency has started showing signs of capitulation as miners have started shutting down underperforming machines and selling Bitcoin to hedge their exposure.
According to CryptoQuant, there are a number of signs of miner capitulation, and historically, it has been indicative of a price bottom. According to the data provider’s indicators, miners have been paid “extremely low wages” for most of the period since April.
The CryptoQuant report notes that miners’ total daily revenue has dropped from $79 million on March 6 to $29 million today. While the excitement over Ordinals and the new Runes protocol initially generated tens of millions of dollars in fees for the network, CryptoQuant notes that transaction fee revenue has fallen to 3.2% of total daily revenue, the lowest share since April 8.
After the Bitcoin halving, older processors are no longer as profitable as newer machines, which means some miners are disconnecting their machines from the network.
According to data from CryptoQuant, after hitting a record hashrate on April 27, the network has experienced a 7.7% drop and is now nearing a four-month low. Additionally, the spike in miner outflows indicates that some people are selling their coins to hedge their exposure.
According to data from The Block, as the three-month anniversary of the halving approaches, the active supply of Bitcoin within 90 days has begun to decline noticeably compared to other time periods. The decrease in transaction volume could be another headache for miners hoping that transaction fees will offset the decrease in block rewards.
However, Bitcoin mining companies appear to be embracing this change aggressively, investing in new processors and securing energy contracts worldwide.
As CryptoQuant points out, miner capitulation has historically been associated with price bottoms. The last time a similar hash rate drop occurred was after the FTX crash in November 2022, when Bitcoin’s price fell below $17,000, but then began to rise.
According to The Block’s Bitcoin price page, the Bitcoin price is hovering around $60,000 at the time of publication, down about 3.5% over the past 24 hours.
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