Bitcoin at a Crossroads – Miners Surrender as Market Stabilizes

Bitcoin was trading near the $59,000 range at press time.
There appears to be some surrender by miners, but the big miners are still piling up.

Bitcoin experienced a major capitulation by miners last week as its price dropped, leading to increased outflows from miners. This occurred alongside a sharp rise in mining difficulty, which reached its highest levels in years, putting additional pressure on miners. However, recent metrics suggest that this capitulation may be coming to an end as Bitcoin has shown signs of stabilizing somewhat.

Bitcoin Miners Surrender

CryptoquantData revealed that Bitcoin saw a major capitulation by miners last week as its price dropped to the $49,000 range. On August 5, daily miner inflows rose to 19,000 BTC, the highest level since March 18.

The selloff came as miners faced increasingly tight profit margins. The margin has fallen to 25%, the lowest since January 22.

Source: CryptoQuant

The analysis also noted that some miners sold portions of their reserves, posting a loss of $22 million — the largest daily loss since May 29. The sharp rise in hashrate and network difficulty drove this wave of surrender.

The metrics have reached an all-time high over the past week, putting additional pressure on miners’ operations. These difficult conditions have forced miners to liquidate their holdings to cover costs, highlighting the pressures they have faced during this period.

Current status of miners’ holdings

That’s not all. Smaller miners’ holdings have hit a low point due to the recent capitulation in the Bitcoin market.

Data from Miner Balance by Cohort reveals that even before this latest capitulation, smaller miners (pink line) were experiencing a steady decline in their Bitcoin holdings – a trend that intensified after the halving event in Q2.

Source: CryptoQuant

On the contrary, the major mining companies have been increasing their holdings. According to the analysis above, the largest miners (purple line) have continued to accumulate Bitcoin, with their total holdings now standing at 66,000 Bitcoin.

This accumulation by large miners has contributed to a decrease in the total surrender of Bitcoin. Especially since the price of BTC is indicating a slight recovery.

Resistance at $60,000 despite recent gains

As Bitcoin price has fallen below its short-term and long-term moving averages (yellow and blue lines), the $60,000 price range has been an important resistance level. Bitcoin’s daily time frame chart analysis indicates that the yellow line is providing resistance at around $61,000, while the blue line is another resistance point at around $62,000.

At the time of writing, Bitcoin saw a gain of over 2% during the last trading session, closing above $58,000.

While this recovery does not yet represent a return to previous highs, it does represent a positive move up from the recent drop to $49,000, which led to miners capitulating.