BTC miners may capitulate by the end of the year
Miners are critical holders of BTC, and they significantly impact the market. Experts believe that the BTC miners' behavior is one of the obvious indicators of what is happening in the crypto industry.
The volatility of cryptocurrencies is based on many factors, which can include:
- internal changes
- geopolitical factors
- regulators' influence
In the case of miners, an indicator that most accurately reflects their mood is Hash Ribbons. It is the divergence of the 30-day and 60-day moving averages of the BTC hashrate. The capitulation of miners means that the value of bitcoin cannot cover the cost of mining it. In the chart below, surrender periods have a red color.
The decline in coin inventories confirms the trend: miners sold off 8,765 BTC in May and June.
Overall, the nine largest companies had assets of 125171 BTC in Q2, while in Q3, it was already 102407 BTC. The decline continued in October as well. For example, Core Scientific liquidated 1,000 bitcoins.
Increased complexity and high hashrate lead to significant losses in the cryptocurrency mining process. The situation also influences the stock market: the securities of the largest publicly traded mining companies are losing value.
According to experts, a bearish trend has yet to unfold, and the hashrate level will also continue to grow. In this regard, the capitulation may intensify even more. If the current situation persists, this will lead to additional pressure and further market destabilization.