Bitcoin Miners Underpaid: A Market Crash Risk?
Bitcoin miners are facing financial distress, according to on-chain data analyzed by IT Tech on CryptoQuant. The “Miner Profit/Loss Sustainability” metric shows a sharp negative spike, indicating miners’ revenue is significantly lower than the mining difficulty. This suggests miners are “extremely underpaid.” Historically, this financial pressure leads miners to sell Bitcoin to cover costs, potentially creating increased selling pressure in the market. However, another indicator, “Bitcoin Miner Selling Power,” which tracks the ratio of miner outflows to total holdings, shows a recent decrease in miner selling. This suggests miners might be delaying selling despite their financial strain. The situation is further complicated by a recent drop in the Bitcoin Hashrate, which measures the total computing power used for mining, following a recent all-time high. This downturn indicates miners are struggling to maintain their operations. The price of Bitcoin has seen recent volatility, briefly dropping near $98,000 before recovering to around $101,100. The confluence of low miner profitability, reduced but still present selling pressure, and a declining hashrate presents a complex situation. While miners may be delaying selling, the unsustainable financial pressure could trigger significant selling in the future, potentially impacting the Bitcoin price negatively. The situation warrants close monitoring, as prolonged financial strain on miners could destabilize the Bitcoin market.
(Source: https://bitcoinist.com/bitcoin-miners-now-extremely-underpaid-ticking-bomb/)
