James Van Straten, a cryptocurrency market expert, recently shared his insights on Bitcoin’s current state, highlighting that mining metrics indicate the market might be nearing its lowest point amid the recent decline.
Van Straten emphasized that the hashband indicator is showing patterns reminiscent of those observed in November 2022. This similarity suggests that the recent downturn could potentially be concluding.
Experts believe that Bitcoin’s sharp correction of nearly 50% may have passed its worst phase. Hash rate trends point to an end of a three-month stretch where miners were giving up their positions. Historically, Bitcoin prices tend to find their bottom during times when miners face significant financial stress.
The phenomenon known as miner capitulation occurs when mining revenues drop below operational expenses. During this phase, less efficient miners are compelled to power down their rigs and liquidate Bitcoin holdings to cover costs such as electricity bills and debts. This results in both a declining hash rate and sustained selling pressure on the market. However, when the 30-day moving average of hash rate surpasses the 60-day average once more, it signals renewed miner activity and easing network strain. Current figures imply this crossover is imminent.
Looking back since 2011, there have been around twenty instances of miner capitulation events—most aligning with local or broader economic downturns—such as those seen in January 2015, December 2018, and December 2022. Notably, Bitcoin reached a low near $15,500 in November last year during one such period.
Furthermore, Van Straten points out that Bitcoin’s present trading price remains under $66,000—the estimated average cost for producing one BTC—which historically marks what traders call a “deep value zone.” The rebound in hash rates alongside growing confidence among miners indicates diminishing selling pressure and hints at an emerging balance within the market.
This content does not constitute financial advice.