Bitcoin (BTC) miners have been capitulating for almost two months, but the end of the pressure could already be here.
That was the conclusion of blockchain infrastructure and cryptocurrency mining firm Blockware as it released its latest intelligence bulletin on July 29.
Report: It is to be “expected” that the capitulation will take place in September
The latest edition of the market research series highlighted changes in the mining ecosystem that are poised to reverse a trend that has been in place since early June.
The miners, judging by the metric on the hash tapes, have been withdrawing for an “extended period of time,” Blockware says, and As of August 1, the hash tapes have been signaling capitulation for 55 days.
“The current capitulation of the miners began on June 7, 2022, and has lasted a significant amount of time. It is important to note that miner capitulations are particularly relevant because they reveal that a large number of machines are no longer hashing,” the firm wrote:
“Since June 7, it is likely that other new generation mining machines have been connected by public and private mining companies. However, enough old-gen machines or inefficient over-leveraged miners have been shut down to the point that the hash rate and difficulty have actually decreased in size.”
The turmoil reflects profitability headwinds generated by the drop in the price of bitcoin, which hit $17,600 in June.which pushed the market back to the end of 2020.
As signs – albeit controversial – emerge that price strength is returning, the chances of better conditions for miners are rising. According to Blockware, the capitulation, defined by the hash tapes, should end before the summer.
“If there are no new lows for bitcoin, we should expect miner capitulation to end in August or September at the latest,” the bulletin adds.
Difficulty breaking multi-month downtrend
When it comes to the return to form of miners, the first signs are already visible on-chain, thanks to automatic adjustments in the fundamentals of the Bitcoin network.
Specific, Mining difficulty is scheduled to see its first increase in two months on August 4, after three consecutive downward adjustments.
“It is currently projected positive, and there is a high probability that it will persist,” Blockware summarized.
The increase, if current spot price levels also persist, will be modest, around 0.5%. For comparison, the previous difficulty drop was -5%.
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