Fears of final capitulation increase when miners send record amounts of Bitcoin to stock exchanges
Key insights:
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Bitcoin miners sent a record 88,000 BTC to stock exchanges on Wednesday.
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Mining profitability has fallen by 80% since the market peak in November.
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A final capitulation may occur when miners unload these assets.
Bitcoin miners are an important function of the network, but they also have a significant influence over market movements. BTC prices have fallen as much as 25% in the last seven days, and the pain may not be over yet.
On-chain calculations have revealed that Bitcoin miners have sent more of their assets to stock exchanges, with a new all-time high of 88,000 BTC sent on June 15, according to CoinMetrics.
The analysis platform also noted an all-time high in dollars with a net worth of $ 1.94 billion BTC sent to stock exchanges yesterday.
On-chain data provider Glassnode confirmed the findings, which reported that the seven-day moving average of miners to switch flows just reached a seven-month high of 9.47 BTC.
Bearish Bitcoin movements
When miners move large amounts of Bitcoin to centralized exchanges, it is usually a sign that they are preparing to liquidate. Currency supply means that the BTC is transferred to a place where it can be quickly converted into stable coins or fiat.
Rising energy costs around the world will also have a major impact on mining revenues, so they may try to compensate for some of these expenses by selling the asset.
Profitability for Bitcoin mining has fallen to its lowest level since October 2020, according to Bitinfocharts. Since the peak of the crypto market in November 2021, the metric has fallen by 80%, from $ 0.45 per day per terahash per second to below $ 0.10 per day per TH / s.
As a result, mining revenues have fallen to their lowest level in a year. Daily income is currently around $ 22.5 million, down 70% from the $ 74.4 million they earned in October 2021, according to Blockchain.com.
Bitcoin hash rate often referred to as data horsepower for the network, remains close to its all-time high, but at 226 EH / s (exahashes per second). Mining problems are also close to peak levels that have exacerbated these income and profitability problems.
Castle Island Ventures partner, Nic Carter, saw the bright side suggests that it was a sign that the markets were close to the bottom.
“Miners’ sales were a key catalyst I was looking for to signal the bottom, given that it’s not over, but it’s important that much of what has apparently already happened,”
A final capitulation?
The concern is that this significant mining sale could lead to a final capitulation event that will further dump the prices of cryptocurrencies. BTC regained the $ 22,500 price level during Thursday morning’s Asian trading session, but a major mining operation is likely to cause it to crash below $ 20K quickly.
Bitcoin is currently 67% down from the all-time high, so there will probably be more pain before the Bears are done since previous market cycles saw a decline of more than 80%.
This article was originally posted on FX Empire
