- BTC miners witnessed 19K BTC sell-off indicating the highest outflow since March 18.
- Bitcoin miners are expanding operations amid price volatility, suggesting a potential market bottom.
Bitcoin (BTC) miners are showing an optimistic approach by expanding their operations, even with Bitcoin’s price volatility. This uptick in mining activity comes after a significant miner capitulation event, which signals a potential price bottom.
Bitcoin mining solves complex puzzles, validates transactions, and secures the network, with new blocks added every 10 minutes. Miners compete to find the correct hash and earn BTC rewards. While it started with CPUs and GPUs, it now uses efficient ASICs. Miners are using renewable energy and can either mine solo for full rewards or join pools for steady income.
On August 5, miners experienced a notable surge in outflows, with 19,000 BTC being sold—the highest amount since March 18. This sell-off happened when Bitcoin was around $49,000, indicating miners sold Bitcoin to cover costs as profit margins shrank. In early July, profit margins had fallen to 25%, the lowest since January 22, 2024, making only five popular mining rigs profitable.
Rising Hashrate And Past Trends Hint A Possible BTC Price Rebound
Despite these financial pressures, Bitcoin’s network hash rate reached a new all-time high of 627 exahash per second this week. This recovery from an 8.5% decline in early July indicates that miners are still investing in their operations.
Historically, miner capitulation events often occur when the operations cost exceed the revenue generated by BTC miners. Similar patterns were observed in March 2023, Silicon Valley bank sell-off, and January 2024, BTC Spot ETF launch following significant market events.
At the time of writing, BTC is trading at $61K with a 4.22% increase in the past day. The 24-hour volume went down about 18.48% to $28 billion suggesting that the market may be preparing for a potential upward trend.
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