The market is really testing investor patience right now.

Bitcoin [BTC] is still trading about 30% below its $126k peak, leaving a lot of holders underwater. For example, the STH cost basis is around $102k. So, short-term holders are seeing roughly 12% in unrealized losses.

The mining side isn’t doing much better either. 

According to Glassnode, total miner revenue dropped from 562 BTC in mid-October to 502 BTC now – An 11% decline. That’s a clear sign miners are feeling the squeeze as revenue and profitability take a hit.

Source: Glassnode

Notably, this drop is happening even as mining difficulty hits new highs. 

In early November, Bitcoin mining difficulty jumped to a record 159 trillion, meaning miners now need more hashing power and electricity just to earn the same rewards. Basically, they’re working harder but making less.

That’s putting some serious pressure on profitability. 

Add in the fact that the market hasn’t fully turned risk-on yet, with BTC’s $90k floor still shaky, it begs the question – Are miners being pushed towards capitulation as revenue drops and difficulty hits record highs?

Bitcoin miners under pressure amid market uncertainty

Looks like it’s still too early to call a bottom.

Institutional capital in Bitcoin hasn’t fully arrived yet. BTC ETFs have been showing highly volatile flows, with money moving in and out day-to-day. The most recent data, for example, highlighted $80 million in net outflows.

Historically, during previous bull rallies, BTC’s big moves have relied on consistent ETF inflows. Without that support, a drop below $90k remains a real possibility. And, it looks like miner patience is already wearing thin right now. 

Back in late November, Bitcoin miners’ net position change stayed in the red, hitting –3,555 BTC. This corresponded with BTC dropping to around $80k. Interestingly, a similar pattern seems to be emerging again.

The attached chart revealed that the metric has flipped back to red, with –487 BTC in net outflows – A sign that some miners may be starting to capitulate. This may be putting pressure on the 30-day BTC supply held in miner wallets.

In essence, another wave of miner distribution could be brewing under the surface. With market volatility still high and bullish BTC bids remaining cautious, a full-blown Bitcoin miner capitulation can’t be ruled out.

Final Thoughts

• Bitcoin miner revenue has dropped 11% in two months, signaling stress in profitability as mining difficulty hits record highs.
• Miners’ net position changes indicated that some are starting to capitulate. 

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Author: Ritika Gupta