Bitcoin (BTC) has been in a downtrend for over two weeks and now trades 13.8% below its all-time high of $73,835, reached on March 14. Analysts argue that BTC must recover its hashrate and shake off “weak hands” to end the downtrend.
Independent analyst Willy Woo noted that Bitcoin’s price would only recover when “weak miners die” and the hashrate recovers.
“This one is for the record books as it's taking a lot of time for miner capitulation post-halving,” Woo wrote in a June 21 post on the X social media platform.
Miner capitulation is a theory that posits that miners will turn off their hardware and sell their coins if Bitcoin falls below a certain price and mining becomes unprofitable.
When Bitcoin “sheds weak hands,” it means “inefficient miners running old hardware and high costs go into bankruptcy. While others are forced to upgrade hardware that’s more efficient” because their revenues have been halved, the analyst explained. “Both cases force miners to sell their BTC to pay for losses or hardware upgrades. ”
“After that’s done and the selling has ended, and only the strong remain, and they hodl waiting for higher prices.”
Woo added that capitulation is taking longer during the current cycle, probably due to profit boosts. “Thanks to ordinal inscriptions.”
He shared the following graph showing that the hashrate recovery is taking longer compared to previous cycles.
In comparison, the hashrate took 24 days to recover during the 2017 cycle and only 8 days in 2020.
“And today. Still waiting for the miners to properly die. 61 days so far.”
Bitcoin hashrate refers to the number of attempts made per second to solve the mathematical puzzle that validates Bitcoin transactions.
When the Bitcoin hashrate rises, more computing power is used, which increases energy costs and lengthens verification and transaction times.
“Bitcoin’s average mining cost is currently at $86,668,” declared fellow analyst Ali Martinez in a June 15 post on X.
“Historically, $BTC always surges above its average mining cost!”
Also weighing in on when the Bitcoin price is likely to end the downtrend is fellow analyst Mr. Anderson who said it will take a “shake out,” which takes place “when price drops sharply, causing less committed traders to sell.’
“The goal is to trigger panic and increased selling,” he explained in a June 18 X post.
“After the weaker traders exit, the price often stabilizes or rebounds as stronger traders buy at lower prices.”
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