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This Metric Indicates Bitcoin Miners Are Capitulating: CryptoQuant
The Bitcoin network is currently experiencing a challenging period for miners; the cryptocurrency’s price is trading at around $96,700, and it has been consolidating between $91,000 and $102,000 over the past week. This price range has made mining less profitable, causing many miners to sell their Bitcoin (BTC) reserves or exit the market entirely.
Miner capitulation refers to a period when miners are unable to cover the costs of their operations and are forced to sell their BTC holdings or leave the market altogether. This phenomenon is often observed during prolonged periods of low prices, which has been the case with BTC over the last week.
The recent report by CryptoQuant analyst Darkfost reveals that the Hash Ribbons metric, an indicator that tracks hash rate fluctuations, has once again flashed a signal indicating miner capitulation. This metric has historically proven to be a reliable predictor of such events and often precedes significant price bottoms in the past.
Interestingly, previous instances of this signal have been followed by a rally in the Bitcoin market. This might suggest that BTC’s current downtrend may not last for too long, as it has done in the past when similar indicators are triggered.
Notably, the Hash Ribbons metric missed only once during the COVID-19 market crash in 2020. The report highlights this signal as a significant indicator of miner capitulation, which often precedes price bottoms and potential bull runs.
Furthermore, the data suggests that Bitcoin’s mining difficulty has reached an all-time high (ATH) at 114.17 trillion following its last adjustment on February 8. Meanwhile, the hash rate surged to reach an ATH of 845 million on the same day. The increase in mining difficulty and the surge in hash rate can only mean one thing: miners are struggling.
As we can see from the data provided by CryptoQuant, Bitcoin’s daily revenue has also taken a nosedive compared to last year’s figures. This indicates that many miners are not earning enough BTC to cover their expenses, leading them to capitulate and sell their holdings or exit the market.
To wrap up this analysis, it seems that the Bitcoin miner situation is as tough as ever before.
Source: cryptopotato.com
