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Data from the on-chain analysis firm shows that Bitcoin miners may end their capitulation, signaling a potential bull market for Bitcoin. While Bitcoin shows signs of recovery, it is currently trading at $59,076, down approximately 0.72% in the last 24 hours, and overall market sentiment is turning positive. As miners are no longer under significant pressure to sell, market conditions may become increasingly favorable for growth.
What is Happening on the Bitcoin Front?
CryptoQuant highlights the Hash Ribbons indicator, which observes the 30 and 60-day moving averages of the Hash Rate. This tool marks the end of miner capitulation, coinciding with the Hash Rate reaching a new peak of 638 exahash (EH/s) per second. This development is noteworthy as it marks the first such recovery since the Bitcoin halving, which reduced the block reward to approximately 3.125 Bitcoin or about $185,000. The CryptoQuant team stated:
“The indicator is not designed to pinpoint the exact price bottom but usually signals a reduction in miners’ selling pressure, preceding higher prices.”
Similar levels of miner capitulation were seen during the FTX bankruptcy process in late June. This was due to high operational costs exceeding the revenue from cryptocurrency mining. According to CryptoQuant’s data, miners sold approximately 28,018 Bitcoin worth $1.68 billion at current market prices between January and August 2024.
CryptoQuant analyst Maartunn stated in an interview that the economic pressures on miners have decreased, reducing the need to sell mined Bitcoin:
“Despite lower mining rewards, mining companies found a way to sustain operations and provide hashrate to the network.”
Details on the Subject
On-chain demand for Bitcoin indicates that the Bitcoin consolidation phase is nearing its end. Popular analyst Axel Adler Jr. shared the following insights:
“After Bitcoin reached the $57,000 level, the daily average token transfer volume increased from $650,000 to $765,000. This coincides with the price stability in Bitcoin’s local consolidation range between $57,000 and $68,000.”
This increase in transfer volume is largely due to panic sales by holders. However, Bitcoin’s price showed resistance, indicating that the market effectively absorbed the selling pressure. The stable price range during this period points to strong demand for Bitcoin, which investors see as attractively priced. Therefore, Adler Jr. believes that Bitcoin is nearing the final stage of its market consolidation. Furthermore, the typical process following the Bitcoin halving event supports an outlook for an upcoming bull market.
