Bitcoin Miner Withdrawals Fall by 90% Since Halving: CryptoQuant Analysis
Summary:
The Bitcoin (BTC) miners' withdrawals have sharply declined by about 90% since the block subsidy halving, as per CryptoQuant's data. After the halving in April, miners have been reshuffling in response to the new economic landscape, with a notable decrease in the hash rate and mining difficulty. The declining hash price has also forced smaller miners to operate with reduced profit margins. The market is said to be absorbing the sell-off, leading experts to anticipate positive trends by the third quarter of 2024.
Bitcoin (BTC) mining withdrawals have experienced a significant 90% decline since the block subsidy halving event according to information from on-chain analysis firm, CryptoQuant. Their June 28 Quicktake publication suggests that there's a dwindling pressure from miners selling their BTC.
Post the halving in April, which saw their per block remuneration chopped by half, miners have been grappling with a shifted economic ground. This has caused a reordering of network fundamentals, reflecting in the drop of both mining difficulty and the hash rate from their respective peak levels.
Explaining the scenario, CryptoQuant associate Crypto Dan said, "Following the halving of Bitcoin, older mining machines became redundant due to reduced profitability. Consequently, mining activities dipped and miners resorted to selling Bitcoin via OTC exchanges to meet operational costs.”
The hash rate signifies a "capitulation" phase among miners, as per the widely used Hash Ribbons gauge — the 30-day average hash rate is less than the 60-day average. Although this is usually a 'buy' indication for BTC traders, Crypto Dan believes this phase is nearing its end.
"Currently, the market appears to be absorbing this sell-off, and thankfully, the frequency and volume of Bitcoin shipments from miners' wallets have been drastically reducing,” he added. “This could mean that miners are feeling less pressure to sell, and if this selling volume is fully absorbed, it may pave the way for a potential market rally.”
CryptoQuant data reveals the highest number of withdrawals from identified miner wallets was over 53,000 on April 10 — this was a mere nine days preceding the halving. This number has now dropped to about 8,000 as of June 27 — about an 85% decrease.
“It’s likely that the cryptocurrency market will witness positive trends in Q3 of 2024,” the article concluded.
However, a falling hash price has compelled smaller miners to operate on slimmer profit margins. Between June 8 and June 24, the hash price, indicating predicted earnings per exahash, fell by 50%. As of June 28, the hash price is at a low of $0.048 as per data from the tracking source, Hashrate Index.
“The Bitcoin hash price slump has put inefficient miners in a tight spot,” commented Bitcoin-centric economist and mining expert Jan Wuestenfeld, on X (previously known as Twitter). “With the halving, there's been a decrease in the hashrate (somewhat halted following a price escalation), however, the current price correction is further diminishing miners' revenues.”
This piece does not include any investment suggestions or advice. Investing and trading involve risks, thus, it is advised readers undertake their own inquiries before making decisions.
Published At
6/28/2024 12:05:00 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.