Bitcoin miners capitulate

The value of Bitcoin depends on supply and demand, investor expectations, as well as on the behavior of miners. When miners begin to capitulate, Bitcoin may experience additional pressure. In part, the behavior of prices in the cryptocurrency market depends on the actions of miners.

Miners in the Bear Market

At the peak of the fall in the value of Bitcoin, its hash rate fell by 30% from 250 Ehash / s to 175 Ehash / s, which may indirectly indicate that a third of miners stopped mining Bitcoin. Now the hashrate has recovered to 200 Ehash/s.

During June, the value of Bitcoin briefly fell to $ 17,625, but managed to rebound and returned to levels of $ 21,000.

Despite the rebound of Bitcoin, capitulations are observed in the ranks of miners, which in previous years usually indicated the end of the bear cycle. As a rule, miners begin to sell all the mined Bitcoins when the reward they receive does not cover their expenses.

In this case, miners are forced to stop their computing power and sell all mined coins to cover expenses. Also, to repay current payments, miners often begin to sell their equipment.

This process will help to weed out the “weak” miners and leave stable players on the market who are able to survive the crisis.

The beginning of the surrender of miners is indicated by the Hash Ribbon indicator, in which the 60-day moving average crossed the 30-day moving average from top to bottom.

This is indirectly confirmed by the surge in sales of digital currencies by miners, which has been observed since May. In May alone, miners sold 4,271 Bitcoins totaling more than $90 million.

Fuel for bulls

Bitfarms, one of the largest Bitcoin miners in the world, sold about 3,000 Bitcoins in June for a total of $ 64 million in order to maintain its liquidity. As soon as the Hash Ribbons indicator changes to the opposite, the surrender of miners will come to an end, and Bitcoin will be able to start another growth cycle.

A similar scenario was observed in August last year, when the 30-day moving average crossed from the bottom up. After that, over the next three months, Bitcoin grew significantly, reaching its historical maximum of 67.5 thousand dollars.

In order to update its highs, Bitcoin must grow by at least 222% from current values. This can be achieved by triggering the stops of bears (players to reduce Bitcoin).

Author: Elvir, Analyst Freedman Club Crypto News