Bitcoin miners are currently facing their lowest profits in more than a decade, even as the price of Bitcoin continues to hover around $107,000. The decline is largely due to transaction fees on the Bitcoin network falling to a 12-year low, severely impacting mining revenues. However, Bitcoin whales are showing no signs of massive selling, confirming their belief in the long-term value of this cryptocurrency. This article will analyze the reasons for the decline in Bitcoin miners' profits and predict the impact of this situation on Bitcoin price trends in the near future, based on reputable data and in-depth analysis of the current cryptocurrency market.
Reasons for the sharp drop in Bitcoin miners' profits
The three main factors affecting Bitcoin miners' profits as pointed out by Alphractal experts include: low transaction fees, fluctuations in Hash Rate, and mining difficulty that has not been adjusted in time.
In particular, the total transaction fees on the Bitcoin network have dropped to their lowest level since 2012, mainly due to the decline in on-chain activity in the current cycle. This means that the revenue from transaction fees that miners receive is increasingly limited, directly affecting the profits they generate.
On the other hand, the Bitcoin network's Hash Rate continues to decline, but the mining difficulty remains high. This unusual situation stems from the fact that many large-scale mining farms have had to shut down their ASICs due to declining revenue and low network demand. This puts a lot of pressure on miners' profit margins.
Normally, a large change in Hash Rate triggers a difficulty adjustment to weed out inefficient miners. However, because the difficulty hasn't adjusted in time, many miners are having a harder time during this cycle.
Bitcoin Whales Stick to No-Sell Strategy
Despite the difficulty in mining, Bitcoin miners are not currently selling. Data from CryptoQuant shows that miner flows to exchanges in June fell to a multi-month low of just 795.5 BTC, suggesting that they are holding on to their Bitcoin holdings.
This is in contrast to previous cycles, when miners typically sold when Bitcoin prices rose or during times of high network activity. This time, even when Bitcoin prices were quite high and on-chain activity was down, Bitcoin whales did not act in a mass sell-off.
Why Miners Are Not in a Rush to Sell Bitcoin
Bitcoin whales’ patience comes from the fact that mining profits, despite falling, are still at levels that allow miners to continue operating steadily. The Puell Multiple at 1.2 indicates that miner earnings are about 20% above historical averages, reflecting the ability to maintain good operations despite market volatility.
Bitcoin Price Pressure and the Future of the Market
As large miners reduce their selling pressure, Bitcoin prices will be less pressured to fall, creating favorable conditions for the next uptrend. Bitcoin whales holding on to their assets amid mining difficulties will stabilize the market, increasing the likelihood that Bitcoin will break out of its accumulation zone around $107,000 and head towards $109,000.
However, if miners find reasons to push for strong selling, supply pressure will increase and could push Bitcoin price down to support around $104,000, causing a temporary downside correction on the price chart.
Conclusion on Bitcoin Miner Profitability and Selling Behavior
Miners’ profitability remains low but still positive, along with whales’ Bitcoin holding strategy, showing confidence in the market’s sustainable recovery. Miners are facing many difficulties but are still betting on the future value of Bitcoin. This is a positive sign supporting the growth trend in the next cycle of the world’s largest cryptocurrency market.
Source: https://tintucbitcoin.com/bitcoin-employees-change-their-face-after-the-fact/
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