Are Bitcoin Miners Capitulating at $70,000?
Bitcoin is facing a crucial moment as signs of miner capitulation emerge around the $70,000 price level. As reported by CryptoQuant, the flow of bitcoin leaving miners’ wallets for exchanges, indicating a selling event, reached a two-month high recently. This was coupled with significant miner-selling through over-the-counter desks, marking the largest daily volume since late March.
According to analyst Mike Colonnese from H.C. Wainwright, miners are now competing for half the number of bitcoins per day network-wide post-halving, leading to a 45% decrease in mining economics. With rising transaction fees only partially offsetting this impact, miners are resorting to selling bitcoins to cover operating expenses and capital expenditures.
The hourly transfer of bitcoins from miners to exchanges surpassed 3,000 on June 9, followed by a sale of 1,200 bitcoins on OTC desks the next day. This influx of supply led to a price drop, with bitcoin struggling to surpass the $70,000 level after reaching a record high of $73,797.68 on March 14.
Despite the decrease in miner revenues post-halving, driven mainly by lower transaction fees, the hash rate of the Bitcoin network remains relatively stable. This indicates that miners are competing with the same computing power for a reduced block reward, further squeezing profitability.
While larger publicly traded miners like CleanSpark and Iren (formerly Iris Energy) are weathering the storm, smaller companies with less efficient operations may struggle in the coming months unless there is a significant price rally. CleanSpark is down 19% for the quarter, while Iren has seen a substantial increase in its stock value.
At Extreme Investor Network, we monitor these trends closely and provide unique insights to help investors navigate the ever-changing landscape of the cryptocurrency market. Stay tuned for more updates on the latest developments and opportunities in the world of investing.