Bitcoin miners could start coming back soon, as early as August, and difficulty is already preparing to increase.
Although Bitcoin (BTC) miners have been giving up for almost two months, the squeeze may be coming to an end.
Blockware, a provider of blockchain mining hardware, came to that conclusion in its most recent Intelligence Newsletter, which was released on July 29.
Report: By September, “Expect” capitulation to be completed
The most recent publication in the market research series focused on modifications to the mining ecosystem that are likely to alter a pattern that has been in place since early June.
According to Blockware, the hash ribbons metric indicates that bitcoin miners have been quitting for an “extended period of time,” and as of August 1, hash ribbons have been a sign of surrender for 55 days.
The current miner capitulation started on June 7th, 2022, and it’s been going on for a while. The company stated: “Miner capitulations are particularly relevant since they demonstrate that a sizable portion of machines is no longer hashing.”
Since June 7th, further next-generation mining rigs have likely been connected by both public and commercial mining corporations. However, the hash rate and difficulty have actually decreased in size as enough outdated equipment or ineffective overleveraged miners have shut off.
The upheaval reflects the profitability hurdles engendered by the Bitcoin price downturn, which reached $17,600 in June — sending the market back to late 2020.
The likelihood of better conditions for miners is increasing as signals of price strength, albeit disputed, are returning. Blockware predicts that capitulation, as characterized by hash ribbons, will end before the summer.
The Newsletter said, “We should expect the miner capitulation to stop in August or September at the latest if there are no new lows in Bitcoin.” Early signs that bitcoin miners could start coming back are already visible on-chain as a result of the fundamentals of the Bitcoin network being automatically adjusted.
Specifically, on August 4, after three consecutive downward adjustments, mining difficulty is scheduled to increase for the first time in two months.
“Right now it’s anticipated to be positive and there is a high possibility that it persists,” said Blockware in summarizing the situation.
If current spot price levels continue, the increase will only be slight, at about 0.5 percent. The previous drop in difficulty was a whopping -5 percent, for comparison.
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