Bitcoin Hashrate Declines, Miners Sell BTC: But Analysts Say This Is Good News

Source: CryptoNewsNet Original Title: Bitcoin Hashrate Declines, Miners Sell BTC: But Analysts Say This Is Good News Original Link: https://cryptonews.net/news/mining/32302057/ Crypto analyst James Van Straten reported that recent data on the Bitcoin network indicates increasing pressure on miners.

According to Van Straten, the hashrate, which represents the total processing power of the Bitcoin network, has fallen by approximately 15% since its peak in October, indicating that miner capitulation has been ongoing for almost 60 days.

The average network power, which was around 1.1 zettahash/second (ZH/s) in October, dropped to levels as low as 977 exahash/second (EH/s). This indicates that, due to decreased profitability, some miners have shut down their machines or been forced to cease operations.

This trend is also reflected in Glassnode’s Hash Ribbon indicator, which measures miner capitulation. The indicator reversed on November 29th, coinciding with Bitcoin’s bottoming out at around $80,000. The reversal of the Hash Ribbon indicates that miners were forced to sell Bitcoin to continue their operations, creating additional supply pressure on the market in the short term.

However, Van Straten argued that capitulation has historically been seen as a reversal signal. According to assessments by VanEck, prolonged periods of miner stress have often preceded new momentum in the Bitcoin price. As inefficient miners exit the market, selling pressure gradually dissipates, and price movements recover. The Hash Ribbon indicator also suggests that the worst phase of capitulation may be over, with the 30-day hashrate average rising back above the 60-day average.

On the other hand, the declining hashrate is also bringing about difficulty adjustments. Bitcoin mining difficulty is expected to decrease by another 4% on January 22nd, falling to approximately 139 trillion. This adjustment marks a negative difficulty change in seven of the last eight periods.

Another factor increasing short-term selling pressure is the shift of some miners towards artificial intelligence (AI) and high-performance computing (HPC). In this context, companies are selling Bitcoin to finance capital-intensive AI and HPC investments. According to analysts, while these sales may put pressure on the price in the short term, a healthier market structure may emerge in the medium term once the capitulation process is complete.