Bitcoin Miner Capitulation At December 2022 Levels – What Happened The Last Time?

It’s no secret that Bitcoin miners are at the moment experiencing important monetary stress, particularly following the completion of the fourth halving occasion. In consequence, these important community members are being compelled to dump their BTC holdings to offset the rising operational prices.

Apparently, the newest on-chain knowledge exhibits that the Bitcoin market is experiencing a wave of capitulation from miners that’s paying homage to December 2022, barely a month after the FTX collapse. The query now could be — what occurred the final time and the way might it impression the present cycle?

Is BTC Prepared To Resume Its Bull Run?

In a latest publish on X, CryptoQuant’s head of analysis Julio Moreno revealed that the Bitcoin miner capitulation has hit ranges similar to December 2022. December 2022 additionally represented the underside of the earlier cycle after the collapse of FTX.

The autumn of the Sam Bankman-Fried-led trade marked a low level for the crypto business, triggering widespread panic and sell-offs. Finally, this huge promoting stress potentiated a pointy decline within the value of Bitcoin.

On the time, the capitulation among the many Bitcoin miners was characterised by a 7.6% drawdown within the Community True Hashrate. In keeping with Julio Moreno’s publish on X, the Community True Hashrate Drawdown can also be at the moment at -7.6%.

A chart exhibiting BTC's Community True Hashrate Drawdown and value | Supply: jjcmoreno/X

The Community True Hashrate Drawdown metric calculates the discount within the computational energy devoted to mining Bitcoin, reflecting miners’ struggles to take care of operations in a good monetary situation. Naturally, the numerous drawdown within the Community True Hashrate and the related miner capitulation have a number of potential impacts on the Bitcoin value.

As seen over the previous few weeks, these can result in a rise in promoting stress, as miners look to promote their BTC holdings. This might put critical downward stress on the value of Bitcoin, driving its worth to decrease ranges.

On the identical time, intervals of great miner capitulation have traditionally preceded market recoveries. Furthermore, as highlighted within the publish, the Bitcoin market reached the cycle backside the final time (December 2022) the Community True Hashrate Drawdown was at this level. This implies that BTC might actually be primed for a value rebound quickly. 

Bitcoin Value At A Look

As of this writing, the value of BTC stands round $60,889, reflecting a 0.2% improve previously 24 hours. The premier cryptocurrency continues to be deep within the purple on the weekly timeframe, with an over 5% decline previously week.

The worth of BTC on the verge of $62,000 on the every day timeframe | Supply: BTCUSDT chart on TradingView

Featured picture from iStock, chart from TradingView