Bitcoin
Bitcoin Miners Are Capitulating, But There’s a Silver Lining
Alex Dovbnya
Miner capitulation usually indicates bottoming conditions, according to Ki Young Ju of CryptoQuant
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Ki Young Ju, founder and CEO of cryptocurrency analytics firm CryptoQuant, has stated that the capitulation of Bitcoin miners is not over yet.
He pointed to historical data showing that such capitulation phases typically end when the average daily value mined is 40% of the annual average. However, it is currently at 72%.
The term “miner capitulation” refers to a period when cryptocurrency miners are struggling to survive due to declining profitability. Miners are forced to liquidate their Bitcoin holdings due to falling prices and fees. While experts are paying close attention to the Mt. Gox refunds and the German government’s sell-off, the miners’ situation is also a major bearish factor.
O hash rate recently dropped to 552 EH/s after reaching its current peak of 657 EH/s, according to data provided by Blockchain.com. This indicates that many miners are currently in the process of shutting down their equipment.
Last week, CryptoQuant noted that substantial drops in hash rate historically tend to be signs of bottoming conditions.
A “boring” market
Ju believes price action will be boring in the coming months, but he urged market participants to remain bullish in the long term while avoiding excessive risk-taking.
According to data provided by CryptoQuant, the cryptocurrency is currently trading at $59,064, after peaking at $59,322 earlier on Wednesday.
Earlier this month, Ju claimed that a “boring” Bitcoin was a buying opportunity.
Last week, the largest cryptocurrency plunged below the $54,000 level. However, bulls have managed to regain some ground since then due to strong inflows recorded by Bitcoin exchange-traded funds (ETFs). On July 9, these products recorded $216.4 million in net inflows.
About the author
Alex Dovbnya
Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader, and journalist with extensive experience covering everything related to the burgeoning industry — from price analysis to blockchain disruption. Alex has authored over 1,000 stories for U.Today, CryptoComes, and other fintech media outlets. He is particularly interested in regulatory trends around the world that are shaping the future of digital assets, and can be reached at alex.dovbnya@u.today.