Bitcoin (BTC) miners are having a hard time in the current market conditions. The profitability of their operations is under pressure and so we see more and more miners turning off their machines; a miners capitulation as they call it. But according to Blockware, there is light at the end of the tunnel. That is what the mining company states in its weekly newsletter.
Bitcoin mining capitulation has lasted 55 days
In the report, Blockware bases its expectations on the Bitcoin Hash Ribbon indicator. This indicator consists of two lines: a 30-day and 60-day average of the hash rate. Since the 30-day line has fallen below the 60-day line, Blockware speaks of a miner capitulation. In other words, many miners turn off their mining machines.
“It is important to note that miner capitulations are particularly relevant as it shows that a large number of machines are no longer hashing [bitcoin minen, red.]. Since June 7, other new-generation mining machines have likely been launched by both public and private miners. However, enough old-generation machines or inefficient miners have been shut down that the hash rate and difficulty have dropped.”
On the hash ribbon graphic from Lookintobitcoin it can be seen that the 30-day line is flattening. So, Blockware states:
“If there are no new lows in bitcoin [prijs] we can expect the capitulation of the miners to end in August or September at the latest.”
BTC mining difficulty may rise slightly again
Blockware also cites the fact that it takes less than 10 minutes on average for a transaction block to be added to the blockchain. In short, the coming difficulty adjustment, the automatic mechanism that tries to keep the block time as close to 10 minutes as possible is expected to be positive.
Besides the fact that it is becoming a little more difficult to mine BTC again, it is a sign that more computing power has become available again in this difficulty epoch, the period in which it is determined whether the difficulty should go up or down.