TL;DR
- Miner Withdrawal Decrease: Post-halving, Bitcoin (BTC) miners’ withdrawal activities dropped by 85%, suggesting reduced sell pressure and potential market optimism.
- Network Fundamentals Shift: The halving event led to a decline in hash rate and mining difficulty, indicating miners’ capitulation and a buying signal for traders.
- Future Market Outlook: Despite the drop in miner withdrawals and hash prices affecting small-scale miners, the overall forecast for the cryptocurrency market remains positive for Q3 2024.
Since the block subsidy halving, Bitcoin (BTC) miners have witnessed a notable decrease in their withdrawal activities, as revealed by data from CryptoQuant, an on-chain analytics platform. This decline in miner sell pressure brings a ray of optimism for the cryptocurrency market.
After the halving event in April, which cut the mining subsidy per block by 50%, Bitcoin miners had to adapt to a new economic landscape. The reduced rewards made older model mining machines obsolete, as they were no longer cost-effective.
Consequently, mining activity decreased, and miners turned to over-the-counter (OTC) transactions to cover operational costs.
Bitcoin (BTC) Hash Rate and Mining Difficulty
Changes in the network fundamentals were evident during this time frame. The hash rate and mining difficulty both decreased from their peak levels. The hash rate, which indicates the computational power protecting the network, showed a sense of “capitulation” among miners.
The 30-day moving average hash rate dropped below its 60-day counterpart, typically seen as a signal to buy for Bitcoin traders.
CryptoQuant contributor Crypto Dan observes that the process of miner sell-off is winding down. Miners are now sending fewer bitcoins out of their wallets, indicating a weakening selling pressure. If this trend continues and the selling volume is absorbed, it could pave the way for an upward rally in Bitcoin prices.
Quantifying the Decrease
Accompanying CryptoQuant data reveals a stark contrast in miner withdrawals. On April 10, just nine days before the halving, known miner wallets saw over 53,000 withdrawals. As of June 27, that figure has plummeted to around 8,000, a remarkable 85% decrease.
The post ends positively, forecasting a bright future for the cryptocurrency market in the third quarter of 2024. Despite this optimism, there are lingering worries for small-scale miners as hash prices continue to drop.
Between June 8 and June 24, hash price, reflecting expected revenue per exahash, dropped by 50%, impacting profit margins for these miners. As of June 28, the hash price stands at $0.048.
In summary, the reduction in miner withdrawals post-halving signals a shift in market dynamics, potentially setting the stage for further price appreciation in Bitcoin. However, challenges persist for smaller miners as hash prices continue to fluctuate.
