CoinDesk reports: CryptoQuant indicates that blockchain data suggests signs of Bitcoin mining industry “surrender,” which could be a precursor to touching local price bottoms before Bitcoin soars to new highs.
Analyzing miners’ indicators responsible for securing the Bitcoin network in exchange for newly issued Bitcoins, as per a report from the market intelligence platform on Wednesday, various surrender signs emerged last month. During this period, Bitcoin’s price dropped by 13%, from $68,791 to $59,603.
One of the signs includes a significant decrease in Bitcoin’s hash rate, the total computing power ensuring Bitcoin’s security. Since hitting a historic high of 623 EB per second on April 27, the hash rate has decreased by 7.7% to 576 EH/s, the lowest figure in four months.
CryptoQuant stated, “Historically, an extreme drop in hash rate is related to reaching price lows.” Specifically, the 7.7% decline is reminiscent of the hash rate drop in December 2022 when Bitcoin’s price fell to $16,000 and then soared over 300% in the following 15 months.
This latest hash rate decline occurred following Bitcoin’s fourth periodic “halving” event in April, halving the coins paid to miners. According to CryptoQuant’s miner sustainability index, since April 20, this has made mining “largely unprofitable,” leading many to shut down now unprofitable mining rigs.
Since the halving, miners’ daily income has fallen by 63%, with Bitcoin’s basic block rewards and transaction fee income significantly higher.
During this period, Bitcoin miners have been moving coins out of on-chain wallets faster than usual, suggesting they may be selling off their Bitcoin reserves. The company noted, “Daily miner outflows have surged to the highest levels since May 21.”
Between the selling activities of Bitcoin miners, whales, and national governments, the June price drop has also damaged Bitcoin’s “hash price”—a measure of the mining profitability per unit of computing power.
CryptoQuant noted, “The average mining income calculated by hash (hash price) continues to approach historical lows.” “Hash price stands at $0.049 per EH/s, slightly higher than the historic low of $0.045 reached on May 1.”
Edited by Ryan Ozawa.
