TL;DR
- Bitcoin miners are under financial strain as their reserves decline to 1.806 million BTC.
- Data shows miners are receiving far fewer coins from exchanges, indicating reduced liquidity.
- High mining difficulty persists despite falling prices, squeezing profit margins.
The Bitcoin mining sector is showing renewed signs of financial strain as miner-held reserves continue to decline, reaching 1.806 million BTC, according to data from CryptoQuant. The trend reflects a steady reduction throughout the second half of 2025, as miners appear to be liquidating portions of their holdings to sustain operations amid weakening prices.
Unlike abrupt sell-offs seen in prior cycles, the drawdown has been gradual and structural, suggesting a response to shrinking profit margins rather than panic. Historically, such behavior arises when mining costs exceed revenue, forcing operators to liquidate reserves to cover energy and maintenance expenses.
While lower reserves can reduce available on-chain supply, they also highlight a sector under pressure, where many operators are struggling to maintain cash flow in a less profitable environment.
Exchange-to-Miner Flows Hit Multi-Month Lows
A second dataset from CryptoQuant, tracking Exchange-to-Miner Transactions, provides further evidence of stress. The report shows miners are receiving fewer coins from exchanges than earlier in the year, with inflows dropping from over 2,000 BTC per day to between 400 and 700 BTC in recent weeks.
Declining inflows indicate three critical trends: miners are no longer accumulating, they are relying on existing reserves, and they are operating with limited liquidity as market conditions tighten. The combination of falling reserves and shrinking inflows suggests that many mining firms are now working with thinner financial buffers than they had earlier in the cycle.
Difficulty Stays High While Prices Drop
Additional data from Glassnode adds context to the mounting pressure. Bitcoin’s mining difficulty remains close to its historical peak near 660 zettahashes, despite the token’s price retreating from above $120,000 to around $88,000.
This disparity between difficulty and market price has created one of the most stressful operating environments for miners in recent history. When difficulty remains elevated, operational costs stay high, while declining prices reduce revenue. The resulting margin compression forces miners to either cut capacity, sell reserves, or shut down less efficient rigs.
Periods where mining difficulty remains high while prices fall have often preceded miner capitulation events, where weaker participants exit the market through forced sales or restructuring.
What It Means for Bitcoin’s Market Outlook
Combined data from CryptoQuant and Glassnode point to a widening gap between mining revenue and operational costs. Should Bitcoin remain below $90,000, miners may be compelled to liquidate more reserves, scale down production, or move operations to lower-cost regions to stay solvent.
Although a mass capitulation is not yet confirmed, the ongoing contraction signals an industry under growing liquidity stress. A strong price rebound could alleviate the pressure quickly, but without such relief, miner selling activity could increase, adding potential headwinds to Bitcoin’s short-term market performance.
