- Bitcoin miners gave up a majority of their May produce to cover the operational costs amid the BTC price crash.
- GPU miners have been selling their graphics cards in the open market and analysts believe the miner crisis could be a sign of Bitcoin price bottoming out.
The recent Bitcoin (BTC) price crash to $20,000 have put BTC miners in a dire situation. Amid the recent price crash, some of the big miners had to liquidate their BTC holdings in order to cover operation costs.
The recent data from Arcane Research presents some shocking reality of the current state of Bitcoin miners. As per data, Bitcoin miners had to sell off their entire May harvest i.e. 100 percent of their Bitcoin production last month. The selling from Bitcoin miners has intensified especially in the last few weeks.
During the first four months of 2022, Bitcoin mining farms sold only 30 percent of their monthly production. The selling jumped by 3x during the last month of May. As per the report, the rate of selling is likely to surge further this month of June.
Currently, the public Bitcoin miners constitute only 20 percent of the total Bitcoin network hashrate. Bitcoin miners are one of the biggest whales with the entire Bitcoin mining community holding 800,000 Bitcoins in total. From these total numbers, public miners hold 46,000 BTC. However, the selling spree triggered by public Bitcoin miners could trigger additional selling pressure.
As the Bitcoin price tanked under $18,000, the metric of “miners to exchange flow” shot up significantly. This metric, which shows the transfer of BTC from miners to exchanges, has shot up significantly to levels last seen in January 2021.
Another metric dubbed Bitcoin hash price, which shows miner revenue per terahash basis has also dropped significantly to the lowest in 1.5 years.
Related: Are Bitcoin miners getting ready to dispose of their stash? New data reveals a growing trend
Bitcoin miner’s capitulation and loan repayment
As per the Bitcoin Hash Ribbon indicator, Bitcoin miners are in a state of extreme distress and are currently capitulating. This also shows that several miners have been unplugging their machines due to a lack of profitability.
Another report also shows that Bitcoin mining is no longer profitable and thus miners have been selling their graphics cards in the market. The report adds:
Mining cards are being sold in China. Auctions sell RTX 3060 Ti models for $300 to $400 or less.
On the other hand, some popular miners are also selling their BTC holdings for loan repayments. Canada-based Bitcoin mining giant Bitfarms liquidated 50% of its holding recently. The company sold 3000 BTC last week for $62 million to make partial payment against its $100 million from Galaxy Digital. Bitfarms’ chief financial officer Jeff Lucas said:
In consideration of extreme volatility in the markets, we have continued to take action to enhance liquidity and to de-leverage and strengthen our balance sheet.
While we remain bullish on long-term BTC price appreciation, this strategic change enables us to focus on our top priorities of maintaining our world-class mining operations and continuing to grow our business in anticipation of improved mining economics.
However, it would not be the right time for Bitcoin investors to give up at this stage. Many believe that this miner crisis could be a strong bottom signal as well.
⚠️Hash Ribbon Indicator: $BTC miners are capitulating⚠️
This distress signal occurred 9 days ago, possibly indicating that the price bottom is near!
“When miners give up, it is possibly the most powerful Bitcoin buy signal ever” –@caprioleio #BTC #Cryptocrash #cryptocurrency pic.twitter.com/SWJjzUEICB
— El Baranito ₿ (@ElBaranito) June 18, 2022
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