Bitcoin Miners Are Giving Up, Where Will The Market Go?

Bitcoin mining profitability is at an all-time low after BTC lost the $20,000 mark and dipped below 2017’s all-time high and is currently struggling to return above general investor sentiment.

Massive network difficulty and rising electricity costs around the world are putting enormous pressure on all Bitcoin miners and cryptocurrencies in general, with the hashrate currently at its lowest level since October 2020 after setting a new peak in early May 2022.

Furthermore, many indicators show that the majority of miners are shutting down mining rigs on a massive scale to minimize their losses as margins are bottoming out.

This could lead to an exponential drop in hashrate in the coming weeks as many large mining farms will most likely decide to go into “hibernation” mode to avoid losses.

In addition to the massive shutdown of miners, the activity of individual mining addresses also signals that miners are selling their holdings massively to offset some of the losses caused by a sudden market change negative.

Furthermore, last week, the analytics platform CryptoRank highlighted that the price of Bitcoin is only moving in line with the average mining cost.

However, even though the data suggests that the Bitcoin price may have dropped to a point that is not beneficial to miners, industry-leading BTC mining company Marathon Digital Holdings says it will continue to work on accumulating more Bitcoins.

In a statement dated June 9, Marathon further asserted that it has only accumulated Bitcoin and has not sold any of its BTC since October 2020. As of June 1, 2022, Marathon holds approximately 9,941 BTC, worth around $200 million at press time.

Marathon Digital Holdings’ “tough” move is a positive signal for the community in the current difficult context, but it is also necessary to consider the general picture to have a more objective assessment of the overall market.

Because long-term Bitcoin investor losses peaked in 2 years, BTC miners got really nervous, combined with Bitcoin mining revenue that just recorded its worst drop of 2022 and only On-chain numbers mentioned at the beginning of the article, frankly, we are in a very “dangerous” situation if the wave of sell-offs from miners is officially triggered.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Harold

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