The Bitcoin miner capitulation based on the hash rate drawdown sparked debate about whether the Bitcoin price bottom has arrived.
Rather, the effects of the halving and the market sentiment, as well as the miner cash requirements to upgrade their equipment and remain competitive, are some factors that saw Bitcoin falter from $71k to $60k in June.The concept of Bitcoin miner capitulation is tied closely to the hash rate of the Bitcoin network. The hash rate refers to the computational power of BTC miners, and it stood at 537.15 EH/s at press time.
The hash rate drawdown chart reflected a 7.6% drop, which was comparable to the drop that came after the FTX exchange collapsed in November 2022 and market sentiment tanked further in December 2022.Two weeks later, they were extremely underpaid, as Bitcoin prices had dropped by 16.2% in that window.This metric’s movement into underpaid territory does not immediately imply a local bottom, but it outlines that miners might choose to wait for better prices before selling.
The data showed that miner outflows were large in February and March, fell slightly in April and May, and were quite subdued in June. This means that miners are sending fewer coins than usual to exchanges. Overall, the hash rate drop reinforces the idea of miner capitulation. The MPI findings show that miners have been liquidating fewer Bitcoin than usual, which was also a bullish sign in the long-term.Akashnath Sumukar works as a Senior Journalist at AMBCrypto. Based in Chennai, India, he has been an avid follower of the cryptocurrency market since Bitcoin’s boom and bust cycle of 2017. A graduate in Chemical Engineering, he is an expert in technical analysis.
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