The Bitcoin hashrate dip, a measure of the relative computing power of the Bitcoin network, has fallen to levels unseen since December 2022, following FTX’s collapse amid the past bear market’s depths. Data from CryptoQuant reveals that the True Bitcoin Hashrate Drawdown now sits at -7.6%, suggesting a potential price floor for the decentralized asset. Supporting the argument for a market bottom are additional indicators like Bitcoin Exchange Reserve, the Miners Position Index (MPI), and Bitcoin Miner Reserve, all indicating minimal selling pressure.
A chart depicting hashrate declines from December 2022 to the present day can be referenced from CryptoQuant. Miner capitulation and the current market cycle have recently been noteworthy. Various signals have indicated that miners are starting to capitulate, hinting at potential Bitcoin (BTC) buying opportunities. In early June, Charles Edwards of Capriole, a crypto hedge fund, highlighted that the Bitcoin Hash Ribbons indicator developed by his firm was signaling a buy opportunity reflective of the network’s computational power slowdown.
Hash Ribbons gauge the network’s hashrate by comparing the 60-day moving average against a 30-day average. A drop in the 30-day average below the 60-day average signifies a relative decline in hash power. The renowned market analyst Will Woo concurred with Edwards, suggesting that the market won’t see new highs until weaker miners are compelled to cease operations—a trend typically observed post-halving but prolonged in the ongoing cycle.
Recent data indicates a significant reduction in Bitcoin miner withdrawals post-halving, by up to 90%, indicating a decrease in selling pressure from miners and a potential upward trajectory for Bitcoin’s price. Post-halving, Bitcoin mining businesses have faced new realities. Ahead of the April 2024 halving event, Cantor Fitzgerald released a report outlining the challenges miners may encounter post the block subsidy reduction.
The report highlighted 11 mining firms, including Marathon Digital, Hut8, and Argo Blockchain, facing potential profitability risks due to high mining costs and reduced rewards. According to the report, if Bitcoin’s market price drops to $40,000, some major mining companies worldwide may be forced to capitulate, underscoring the post-halving challenges within the mining industry.
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