When BTC mining drops 85%, the pressure on Bitcoin miners to sell ‘weakens’

Since the block subsidy was halved, Bitcoin mining has dropped by 90%, according to the data.

In a Quicktake post on June 28, onchain analytics platform CryptoQuant suggested that mining sales pressure is “fading.”

CryptoQuant: Bitcoin Mining “Decreasing Rapidly”

Bitcoin (BTC) miners have spent several months adjusting to the new economic reality after mid-April, when they cut their mining subsidies by 50 percent.

Network fundamentals have reflected the changes that have been taking place since then, with both hash speed and mining difficulty dropping from all-time highs.

“After the Bitcoin halving, mining rewards were cut in half, so older model mining machines weren't used because they weren't cost-effective,” said CryptoQuant contributor Crypto Dan.

“As a result, mining activity slowed down, and miners started selling Bitcoin in OTC transactions to cover mining costs.”

Hashrate, in fact, reflects the state of “capital” among miners as measured by the popular Hash Ribbons – the 30-day moving average hash rate is below the 60-day equivalent.

While that in itself is typically considered a buy signal by Bitcoin traders, Crypto Dan already sees a twist in the trend.

“It can be seen that the current market is in the process of consolidating this sale, and fortunately, the number and number of bitcoin miners sending from their wallets has been decreasing rapidly recently,” he said.

“In other words, miners' selling pressure is weakening, and if all the selling is absorbed, the rally may resume.”

Accompanying CryptoQuant data puts the peak number of withdrawals from known mining wallets at more than 53,000 on April 10 – halved.

Since then, that figure has dropped to 8,000 as of June 27 — an 85% drop.

“Positive movements in the cryptocurrency market can be expected in the third quarter of 2024,” the post concluded.

Hash price poses a threat to small BTC miners

Cointelegraph reports that the drop in hash prices has reduced profit margins for small miners.

Related: Bitcoin Mayer Multiple Hits Recent Lows With $30K BTC Price

The price of the hash, which reflects the anticipated earnings, has fallen by 50% between June 8th and June 24th alone.

Data from resource tracker Hashrate Index put the hash rate at $0.048 as of June 28.

“Bitcoin's declining hash value has recently put less efficient miners under pressure,” Jan Wustenfeld, a Bitcoin-focused economist and mining expert, commented on X.

“After the halving, rates started to decrease (partially halted due to price increases), but the current price adjustment will reduce miners' incomes even more.”

This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.