Analyst Disputes Bitcoin Miners’ Capitulation Post-Halving

Known by the pseudonym Checkmatey, Glassnode analyst James Check questioned the notion of Bitcoin miners capitulating after the halving, though he acknowledged they are “treading water.”

“We are in a period of ‘Difficulty Ribbon’ inversion, and blocks are being generated 14 seconds slower than they should be. This indicates there is less hash rate in the network,” confirmed Checkmatey.

However, in his assessment, no more than 5% of Bitcoin’s computational power is experiencing difficulties. Check believes this is “not that much,” and the market situation does not resemble a “total sell-off.”

According to Glassnode, the hash rate smoothed by a seven-day moving average (7 DMA) stands at 592.2 EH/s. This figure is approximately 9% lower than the 649.7 EH/s recorded just before the block reward halving in April.

“Miners might be treading water, but they are likely not capitulating on the full scale of a bear market. They are probably just stuck, mining 10 bitcoins and selling them,” suggested Checkmatey.

The analyst also noted that the share of fees in the total revenue of cryptocurrency miners has reached 10%. He stated that miners need to adapt to a situation where network fees become the primary source of revenue following the reduction of the block reward from 6.25 BTC to 3.125 BTC.

One very positive trend for #Bitcoin is that transaction fees represent an increasingly large proportion of miner revenues

Miners must adapt and adjust to fees becoming their primary revenue stream, forcing the industry to further innovate, and apply efficient capital management pic.twitter.com/hHTnW1qqhb

— _Checkmate ??⚡☢️?️ (@_Checkmatey_) June 21, 2024

Earlier, the inversion of Hash Ribbons—where the 30 DMA surpasses the 60 DMA—was highlighted by the metric’s creator, Capriole Investments founder Charles Edwards.

In his view, this phase signifies miner capitulation and provides an “optimal signal” for purchasing digital gold.

By mid-June, Bitcoin reserves held by cryptocurrency miners had fallen to 2021 lows.