Bitcoin (BTC) miners have been capitulating for nearly two months, but the end of the squeeze may already be here.
This is the conclusion reached by Blockware, a company specializing in blockchain infrastructure and cryptocurrency mining, when publishing its latest newsletter on July 29.
Description: Should be given up by September.
The latest edition of the market research series highlighted changes in the mining ecosystem that could reverse a trend that has been in place since early June.
The miners, judging by the metric hash ribbons, have retreated for an “extended period”, says Blockware, and on August 1, the hash ribbons are reporting a 55-day capitulation.
“The current miners’ surrender started on June 7, 2022, and it’s been a long time. The most important thing is that the miners’ capitulations are extremely relevant because they show that there are still a large number of hashing machines,” the firm writes:
“Since June 7, other next-generation mining devices have probably been plugged in by public and private mining companies. However, many old generation machines or over-geared inefficient miners have died, that the hash rate and difficulty have really increased.”
This rise reflects the obstacles to profitability caused by the fall in the price of bitcoin, which reached $17,600 in June – sending the market back to the end of 2020.
As signs emerge – albeit disputed – that price strength is returning, odds are improving for better conditions for miners. According to Blockware, compliance, as defined by the hash ribbons, should be complete before summer.
“If there is no new drop in bitcoin, we should expect the miner’s capitalization to end in August or September at the latest,” the newsletter says.
Difficulty due to the break of a multi-month downtrend
As for miners getting back into shape, the first signs are already visible on the chain, thanks to automated adjustments to the fundamentals of the Bitcoin network.
Also Read: Will Bitcoin Mining Industry Collapse? Analysts explain why the crisis is actually an opportunity
Specifically, mining difficulty is set to see its first increase in two months on August 4, after three consecutive downward adjustments.
“Currently, the forecasts are positive and it is very likely that they will be maintained”, summarizes Blockware.
If current spot price levels also continue, the increase will be small, around 0.5%. For comparison, the previous drop was -5%.
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