Bitcoin (BTC) miners have been capitulating for almost two months, but now an end may be in sight.
Blockchain infrastructure and cryptocurrency mining company Blockware hinted at this in its latest intelligence newsletter on July 29.
Report: Surrender is “expected” to end in September
In the current issue of the newsletter, changes in the mining ecosystem were highlighted, which signal a change in trend since the beginning of June.
According to the hash ribbons indicator, miners have been retreating for “a long time,” according to Blockware. On August 1, the indicator has been signaling a capitulation for 55 days.
“The current miner surrender began on June 7, 2022 and has lasted a considerable amount of time. It should be noted that the capitulations of miners are particularly relevant, as they show that many machines no longer hash, “says the company:
“Since June 7, more new-generation mining equipment has probably been put into operation by listed and private mining companies. However, enough old-generation machines or inefficient, overloaded miners have now been shut down, so that the hashrate and the difficulty have actually decreased.”
Bitcoin Hash Ribbons, Chart. Source: LookIntoBitcoin
This upheaval highlights the obstacles to profitability that have arisen as a result of the Bitcoin price slump. The price fell to $ 17,600 in June, pushing the market back to the level of the end of 2020.
There are more and more signs that Bitcoin is finding strength again, even if these are controversial. But the chances of better conditions for the mining companies are at least increasing. According to Blockware, the capitulation, as the hash ribbons signal, should be finished before the summer.
“If there are no new lows in Bitcoin, we can expect the miners’ capitulation to end in August or at the latest in September,” the newsletter continues.
In this context: Bitcoin (BTC) and Ethereum (ETH) in the weekly review: support held even after FOMC session
Difficulty should end several-month downtrend
The first on-chain signals are already visible that the miners are getting back into shape. For example, the adjustment of the Bitcoin difficulty.
The mining difficulty will rise again on August 4 for the first time in two months, having previously been revised down three times in a row.
“An increase is currently being forecast and there is a high probability that this will remain the case,” as Blockware summarized.
If the price remains at the current level, the increase will be rather modest at around 0.5 percent. For comparison, the previous decrease in difficulty amounted to 5 percent.
Overview of the fundamentals of the Bitcoin network (screenshot). Source: BTC.com
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