• Bitcoin miners’ capitulation has been relatively low in the past 5 years.
• Rising difficulty and hash rates could add selling pressure on miners.
• Increased selling activity can lead to a downward price movement for Bitcoin.
What is Miner Capitulation?
Miner capitulation refers to the act of Bitcoin miners stopping or reducing their mining activities due to unfavorable market conditions, typically caused by declining Bitcoin prices or increased mining difficulty.
Relatively Low Miner Capitulation
Recent data indicated that miner capitulation over the last 5 years has been relatively low. This suggests that compared to previous years, miners have been resilient and have continued to operate their mining operations despite potential challenges in the Bitcoin mining ecosystem.
The surge in mining difficulty increases the effort required to mine new bitcoins, resulting in higher operational costs and reduced mining rewards for miners. To cover expenses, some miners might be compelled to sell more of their mined bitcoins thus leading to increased selling pressure on the market which affects the price of bitcoin negatively.
The rising hashrate could also contribute to a rise in selling pressure for miners as competition among them intensifies due to more powerful equipment investments needed by them causing financial pressure and they may need to sell more of their mined coins resulting in higher selling pressure on the market.
Overall, if BTC’s price falls further, it could impact various sectors of the crypto industry, especially miners as rising difficulty and hashrate adds on more selling pressure leading potential downward movements in its prices which is why miner capitulation should be a cause for concern.