Final Capitulation Fears Mount as Miners Send Record Amounts of Bitcoin to Exchanges

Bitcoin miners are an important part of the network, but they also have a big say in how the market moves. Bitcoin prices have dropped by 25% in the last seven days, and the suffering may not be done yet.

According to CoinMetrics, on-chain data show that Bitcoin miners have been transferring more of the commodity to exchanges, with a new all-time high of 88,000 BTC transferred on June 15.

With a net $1.94 billion worth of BTC delivered to exchanges yesterday, the analytics platform reported an all-time high in monetary terms.

The results were corroborated by on-chain data source Glassnode, which reported that the seven-day moving average of miners to exchange traffic had recently achieved a seven-month high of 9.47 BTC.

Bitcoin's Bearish Trends

Miners often shift huge quantities of Bitcoin to centralized exchanges as an indication that they are about to liquidate. BTC is being moved to a site where it can be easily converted into stablecoins or money, as seen by exchange inflows.

Rising energy prices throughout the globe will have a significant effect on mining income, thus they may be selling the asset to offset some of those costs.

According to Bitinfocharts, bitcoin mining profitability has plummeted to its lowest level since October 2020. The measure has dropped by 80% since the crypto market peaked in November 2021, from 0.45 USD per day per terahash per second to less than USD 0.10 per day per TH/s.

As a result, mining income has dropped to its lowest point in a year. According to Blockchain.com, daily income is presently about $22.5 million, down 70% from the $74.4 million earned in October 2021.

The Bitcoin hash rate, sometimes known as the network's computational horsepower, is still around its all-time high of 226 EH/s (exahashes per second). Mining difficulty is also at an all-time high, exacerbating the income and profitability problems.

Nic Carter, a partner at Castle Island Ventures, saw the good side, claiming that it was an indication that markets were nearing bottom.

"Miner selling was a significant trigger I was waiting for to mark the bottom; granted, it's not through yet, but it's essential to note that a lot of it seems to have already occurred," says the author.

A Last-Ditch Effort?

The fear is that this massive miner sell-off will trigger a final capitulation event, further down crypto asset values. During Thursday morning's Asian trading session, BTC regained the $22,500 price mark, but a large miner unload is expected to send it plunging down below $20,000.

Since prior market cycles experienced 80 percent+ drawdowns, there is likely to be more pain before the bears are done. Bitcoin is already 67 percent down from its all-time high, thus there is likely to be more suffering before the bears are done.