Miner capitulation generally occurs when operating costs exceed the revenue generated by BTC mining. Miners then sell their Bitcoin reserves to cover their costs, creating downward pressure on the price of the cryptocurrency. However, this capitulation phase is often seen as a market bottom signal, indicating that the price of bitcoin could soon rebound.
In 2024, Bitcoin miners were particularly hard hit by halving, which reduced their daily revenue from $79 million to $29 million. This drastic drop in revenue forced many miners to turn off their equipment, resulting in a 7.7% decrease in hashrate, the total computing power of the Bitcoin network.
There are recent signs that the miners' capitulation may be almost over. The daily income of miners recently increased to $35 million, approaching the annual average of $40 million. If this trend continues, it could indicate a stabilisation of the market and a possible recovery in the price of bitcoin.
Analysts point out that this capitulation by miners is comparable to that seen at the end of 2022, after the collapse of FTX, which marked the bottom of the market at that time. This similarity suggests that the Bitcoin market could be on the verge of a new bottom, paving the way for a potential recovery.
While the Bitcoin miners' capitulation could create downward pressure on the cryptocurrency's price, it could also signal an inflection point. With signs of miners' revenues stabilising and selling pressure easing, the Bitcoin price could soon see a recovery. Investors and market watchers will be watching these developments closely to assess the next steps for the Bitcoin market.
