Data from a blockchain analytics firm suggests that the capitulation of Bitcoin (BTC) miners may be ending, signaling the start of a potential Bitcoin bull market.
With Bitcoin showing signs of recovery, currently trading at $60,456, up about 2.8% in the last 24 hours, the overall market sentiment is turning positive. With miners no longer under heavy selling pressure, market conditions are increasingly supportive of gains.
Bitcoin May Be in the Early Stages of a Bull Rally
CryptoQuant highlights the Hash Ribbons indicator, which tracks 30- and 60-day moving averages of the Hash Rate. This tool just signaled the end of miner capitulation, coinciding with the Hash Rate reaching a new peak of 638 exahashes per second (EH/s).
The event is notable because it marks the first such rebound since Bitcoin’s halving, which saw the block reward for miners fall to around 3,125 BTC, or about $185,000.
“While the indicator is not designed to pinpoint a price low, it often precedes price increases, signaling a reduction in mining pressure,” CryptoQuant explains.
Read More: Bitcoin (BTC) Price Prediction 2024/2025/2030
In late June, BeInCrypto reported a miner capitulation comparable to that seen during the FTX crash. This was due to high operating costs exceeding the income from cryptocurrency mining. According to CryptoQuant, from January to August 2024, miners sold about 28,018 BTC worth $1.68 billion at current market prices.
In an interview with BeInCrypto, CryptoQuant analyst Maartunn said that as economic pressure on miners decreases, so does the need to sell mined bitcoins.
“Despite lower mining rewards, mining companies have found a way to continue to operate their business and supply hashrate to the network. This means they can keep their Bitcoin reserves and do not have to sell them to cover mining costs such as new machines, electricity or staff,” Maartunn told BeInCrypto.
Additionally, the demand for Bitcoin on the network suggests that BTC’s consolidation phase may be nearing an end.
“After Bitcoin reached $57,000, the average daily token transfer volume increased from $650,000 to $765,000. This coincides with Bitcoin price stabilization in the local consolidation range of $57,000-$68,000,” noted another analyst Axel Adler Jr.
This surge in transfer volume was largely due to panic selling by holders. However, the price of Bitcoin has shown resilience, indicating that the market has effectively absorbed the selling pressure.
Read more: What Happened During the Last Bitcoin Halving? Predictions for 2024
The stable price range during this period indicates a steady demand for Bitcoin, which investors find attractively priced. Therefore, Adler Jr. believes that BTC is approaching the final phase of market consolidation. Moreover, the typical pattern after Bitcoin halving confirms the prospects of an impending bull market.
“The average cycle starts 170 days after the Bitcoin halving. We are currently at day 121,” said crypto analyst Quinten.
