bitcoin (BTC) miners have been capitulating for almost two months, but the end of the pressure could already be here.
This was the conclusion of Blockchain infrastructure and cryptocurrency mining company Blockware, as it published its latest Intelligence Newsletter of July 29.
Report: ‘Expect’ surrender to be done by September
The most recent edition of the market research series highlighted shifts in the mining ecosystem that could reverse a trend in place since early June.
“The current miners’ surrender began on June 7, 2022 and has lasted for a considerable time. Importantly, the miners’ capitulations are particularly relevant as they reveal that a large number of machines are no longer hashing,” the firm writes:
“Since June 7, other next-generation mining rigs have likely been plugged in by public and private mining companies. However, enough old generation machines or inefficient overleveraged miners have died out, that hash rate and difficulty has actually shrunk in size.
The upheaval reflects the obstacles to profitability caused by the drop in the price of Bitcoin, which reached $17,600 in June, sending the market back to the end of 2020.
As signs – albeit disputed – emerge price strength returns, so the chances of better conditions for miners improve. According to Blockware, the surrender, as defined by the hash ribbons, should be complete before the summer.
“If there are no new lows in Bitcoin, we should expect the miner capitulation to end in August or September at the latest,” the Newsletter added.
Difficulty due to breakout of multi-month downtrend
Regarding the return to form of miners, the first signals are already visible on-chain, thanks to automated adjustments to the fundamentals of the Bitcoin network.
Specifically, mining difficulties are expected to experience their first increase in two months on August 4 after three consecutive downward adjustments.
“Currently, it is expected to be positive, and there is a high probability that it will persist,” Blockware summarized.
The increase, if current spot price levels also persist, will be modest at around 0.5%. For comparison, the previous difficulty drop was -5%.
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