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Bitcoin Miners Are Capitulating: What’s Happening?
Arman Shirinyan
Bitcoin Miners Are Capitulating, Numerous On-Chain Charts Suggest; however, things may take a different turn in the future
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The capitulation of Bitcoin miners were not expected on the cryptocurrency market. However, it could have been the perfect solution to the current state of digital gold. That’s why it could become a fuel for the growth of BTC.
In the last 18 months, That of Bitcoin the hashrate has been trending upwards, which is representative of good security on the network; However, data shows that the trend has been broken, indicating that some miners are throwing in the towel or, rather, abandoning mining altogether.
Miners’ capitulation manifests itself through a visible drop in hashrate, which measures the processing power dedicated to mining Bitcoin.
The CryptoQuant graph shows a drop in the true hashrate of the network. Otherwise, constantly increasing, the real hashrate is seeing a decline. From the lower end of the hashrate we can actually tell that computing power is declining, a deviation from the increase we had seen over the last year and a half.
This could be due to increased costs of operations and reduced profitability for miners, with the halving not having occurred, in terms of price trends. As the price of Bitcoin continues to fall, it becomes complicated for mining operations to remain profitable in their operations. Obviously, this has led some miners to shut down their rigs completely, while others have scaled back their mining activity activity.
A drop in hashrate generally leads to a readjustment period for Bitcoin. Capitulation by miners causes the mining difficulty to adjust to an easier path for the remaining miners to mine blocks. This adjustment can lend itself to efficiency and even cost reduction for active miners.
In the past, major price action has occurred after hashrate drops. The capitulation of the miners could currently reduce the selling pressure. As selling pressure declines, the price of an asset can stabilize and even rise if demand exceeds supply.
About the author
Arman Shirinyan
Arman Shirinyan is a trader, cryptocurrency enthusiast and SMM expert with more than four years of experience.
Arman firmly believes that cryptocurrencies and blockchain will be in constant use in the future. Currently he focuses on news, articles with in-depth analysis of crypto projects and technical analysis of cryptocurrency trading pairs.