Since the Bitcoin ecosystem slowdown and halving event, inefficient miners have been forced to either cease operations or temporarily suspend mining activities. As a result, Bitcoin’s hash rate has retreated to late 2022 levels. Despite the Rune protocol briefly enabling miners to earn substantial transaction fees, the cooling of this protocol has reduced miners’ daily fee contributions to less than 2 BTC on average, compelling inefficient miners to exit or pause mining operations.
In mid-June, QCP Capital indicated that this phenomenon of miners selling off coins was a primary constraint on Bitcoin’s price increase. The decline in Bitcoin’s hash rate, currently at 556.16 EH/s with a recent 7% drop in the last 24 hours, reflects miners’ capitulation, according to CryptoQuant data, which shows Bitcoin’s hash rate has dropped to its lowest level since December 2022.
Over the weekend, CryptoQuant CEO Ki Young Ju agreed with a commentator’s view that the surrender of small miners typically precedes a bull market. Market analyst Will Woo echoed this sentiment, explaining that Bitcoin’s price is likely to rebound once weaker miners capitulate and network hash rate stabilizes. With Bitcoin’s hash rate already at historical lows, a gradual recovery in hash rate may accompany a price rebound.
Withdrawals from miner-related wallets decreased by 85% on the 28th, indicating diminishing selling pressure from miners and providing support for Bitcoin’s price.
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