Miner Capitulation Continues: Financial Struggles and Market Impacts
We are now 33 days into the current phase of miner capitulation, with the average duration typically being 41 days. This suggests that some miners are still experiencing significant financial strain due to the previous halving, which has made their operations unprofitable. The hash rate has decreased by over 12% since its peak on May 26, with the next difficulty adjustment scheduled for June 20 expected to be slightly positive, as reported by Newhedge.
Unexpected Resilience in Hash Rate
Despite the hash rate’s decline, it has not reached the anticipated 25% drop following the halving, demonstrating unexpected resilience. This resilience can be attributed to two main factors: elevated transaction fees driven by Runes and Inscriptions and miners’ strategic financial planning. Miners have accumulated reserves and are selling Bitcoin to sustain their operations. Over the past 30 days, miners have distributed more than 3,000 BTC, continuing a significant distribution trend since December 2023, a level of activity not seen since the 2017-2018 period, according to Glassnode data.
Miner Balances and Market Impact
Miners vs Issuance (Source: Glassnode)
Glassnode data indicates that miner balances have decreased by approximately 30,000 BTC since October 2023, now standing at 1.8 million BTC.
Balance in Miner Wallets (Source: Glassnode)
This ongoing distribution creates a significant headwind for Bitcoin, adding selling pressure to the market and influencing its price dynamics.
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