Bitcoin (BTC) miners reflect market optimism by increasing network capacity despite the recent price drop. The hashrate, indicating the network’s processing power, set a new record this week, highlighting the mining sector’s recovery.
Bitcoin Network’s Hashrate Recovered
Mining activity regained momentum after a common “capitulation” event following a significant drop in Bitcoin’s price. On August 5, Bitcoin miners observed a large outflow of 19,000 BTC. This was the highest outflow since March 18 and indicated that miners were selling Bitcoin to cover rising costs. On the same day, Bitcoin’s price fell to $49,000.
On-chain analytics firm CryptoQuant reported that Bitcoin’s network hashrate reached a new peak of 627 exahash/second this week. This level indicates a strong recovery following an 8.5% drop at the beginning of July. This recovery shows that miners maintain positive expectations in the sector despite the drop in Bitcoin’s price and record-low mining revenues.
Potential Miner Capitulation Sign
For those unfamiliar, hashrate refers to the processing power miners use to produce new BTC and validate transactions on the network. Millions of calculations are performed every second, new blocks are mined, and this process is quite costly. At the beginning of July, only five popular mining devices could operate profitably.
CryptoQuant stated, “We observed increased miner outflows after the price touched $49,000 last week, which could indicate miner capitulation.” The firm noted that miners’ profit margins had fallen to as low as 25%, the lowest level seen since January 22, 2024.
Miner capitulations typically occur near local bottom levels of Bitcoin’s price during bull markets. Since 2023, increases in miner outflows have coincided with local bottom points, such as after the collapse of Silicon Valley Bank in March 2023 and the price correction following the launch of the spot Bitcoin ETF in the U.S. in January 2024.
According to recent data, Bitcoin is trading around $61,000 with a 2.8% increase in the last 24 hours. The resurgence of miners paints an optimistic picture for the future performance of the largest cryptocurrency.
