Bitcoin Miners: Signs of a Shift

As the cryptocurrency market continues to digest the effects of April’s halving, Bitcoin miners are adjusting to a new economic reality. The halving, which cut mining rewards by 50%, has led to a significant decrease in mining activity and a reshuffling of the network fundamentals.

Mining operations have had to adapt to the new reality

According to on-chain analytics platform CryptoQuant, miner sell pressure is weakening. The number of Bitcoin withdrawals from miner-affiliated wallets has dropped by 85% since the halving, from over 50,000 per day to under 10,000.

“After the Bitcoin halving, mining rewards were cut in half, so older model mining machines were no longer used as they were no longer cost-effective.” - Crypto Dan, CryptoQuant contributor

This decrease in mining activity has led to a decline in hash rate and mining difficulty, which has reflected a state of capitulation among miners, according to the Hash Ribbons metric.

 The Hash Ribbons metric reflects a state of capitulation among miners

However, Crypto Dan believes that this process is winding down, and the current market can be seen as being in the process of digesting this sell-off. As a result, the selling pressure of miners is weakening, and if all of their selling volume is absorbed, a situation may be created where the upward rally can continue again.

Despite the challenges faced by smaller-scale miners due to the declining hash price, which has led to reduced profit margins, Bitcoin-focused economist and mining specialist Jan Wuestenfeld remains optimistic about the third quarter of 2024.

 The declining hash price has put pressure on smaller-scale miners

In conclusion, the data suggests that Bitcoin miners are adjusting to the new economic reality, and the selling pressure is weakening. As the market continues to digest the effects of the halving, it will be interesting to see how the network fundamentals evolve and what the future holds for Bitcoin miners.