Bitcoin (BTC) Miners' Capitulation Continues: Will It Ever End?
Bitcoin miners have been actively selling their holdings since the halving event. According to on-chain data, the amount of selling pressure from Bitcoin miners hasn’t decreased. At this rate, soon there might be very little BTC left for them to sell. The halving event usually leads to miner capitulation because it cuts the block reward in half. This means mining becomes less profitable, forcing miners to liquidate their Bitcoin holdings to cover their expenses.
What is Miner Capitulation?
In simpler terms, when miners can't make enough money due to reduced rewards, they end up selling their Bitcoin. This event has been going on for a while now, putting a lot of pressure on the market to sell.
Hash Ribbons Indicating Stress
The hash ribbons chart, an indicator of miner surrender and recovery stages, still shows stress. This chart highlights that the phase of miner capitulation is ongoing and it hasn’t been resolved yet. The constant selling pressure is preventing Bitcoin's price from recovering to previous highs. One major reason Bitcoin is struggling to break above significant resistance levels is the nonstop selling by miners.
Technical Indicators: EMA and RSI
Bitcoin is struggling to maintain its position above the 50 EMA and 100 EMA and is moving dangerously close to the 200 EMA. The Relative Strength Index (RSI) at 43.10 suggests that Bitcoin is neither overbought nor oversold. However, relentless selling by miners has kept the market in a bearish direction.
Trader Sentiment and Funding Rates
Funding rates on popular exchanges like Binance, OKX, and Bybit show different levels of long and short interest in Bitcoin. These funding rates reveal the sentiment of traders and potential price movements. Currently, the funding rate for Bitcoin is relatively neutral, indicating an even-handed attitude toward trading.
Market Impact and Potential Recovery
The market is still heavily impacted by miners' sales. The end of this capitulation stage could depend on several factors. For instance, if there was a substantial increase in Bitcoin's price, making mining profitable again, miners might not need to sell their holdings.
In summary, the ongoing capitulation phase continues to affect the Bitcoin market, including its ability to recover. The situation will likely remain unchanged until there are significant changes in Bitcoin's price that could incentivize miners to hold onto their assets rather than selling.
