Bitcoin miners capitulate under $100K

Bitcoin (CRYPTO:BTC) miners are reportedly undergoing a "capitulation" phase as they struggle with operational costs, while Bitcoin trades below $100,000.

This situation arises when miners find it difficult to cover their expenses due to factors such as declining BTC prices and increasing mining difficulty.

The Hash Ribbons indicator, which tracks hash rate fluctuations, has signaled this capitulation, according to CryptoQuant analyst Darkfost.

This metric identifies periods when miners sell their BTC reserves or exit the market because they cannot sustain operations.

Historically, miner capitulation has often preceded significant price reversals.

Bitcoin's price has been consolidating between $91,000 and $102,000, making block production less profitable for miners.

Less efficient miners are particularly affected, prompting them to liquidate their holdings.

The increased mining difficulty, reaching a new high of 114.7 trillion on February 4, further intensifies competitive pressures.  

The hash ribbon indicator signals miner capitulation when the 30-day moving average of hashrate falls below the 60-day average, suggesting mining is economically unviable.

The previous instance of this signal occurred in October 2024, before Bitcoin's value surged.

Bitcoindata21 noted that a potential turnaround may happen when the 30-day moving average of the hashrate surpasses the 60-day moving average.

The increased difficulty coincides with Bitcoin's rising hash rate, which hit an all-time high recently.

While solo miners can occasionally succeed, as one miner did with a $310,000 reward, the odds are generally slim.

Historically, the Hash Ribbons indicator has been a reliable signal, highlighting optimal entry zones for investors.

If the pattern continues, Bitcoin's price could stabilise around $91,000.

At the time of reporting, the Bitcoin (BTC) price was $97,870.23.