Bitcoin’s price struggles earlier this week appear to be largely due to a significant sell-off by miners, commonly referred to as a miner capitulation. On-chain data shows that the total amount of BTC held by miners has fallen sharply over the past three days. Notably, these miners recently sold $1.71 billion worth of BTC in a compact period of time. As you can imagine, this trend is worrying for Bitcoin, especially as the cryptocurrency is currently struggling to regain momentum and get back above the critical $60,000 price level.

Miners are selling huge amounts of bitcoins

According to chain data reported on social media by crypto analyst Ali Martinez, Bitcoin miners recently sold 30,000 BTC worth about $1.71 billion in the last 72 hours. Interestingly, such a massive sell-off occurred at a time of significant increases in mining difficulty.

Data from Mempool shows that Bitcoin mining difficulty spiked on Wednesday, September 11, reaching a novel all-time high. Interestingly, the mining difficulty reached a record of 92.67 trillion, breaking the previous record of 90.67 trillion set in July. Mining difficulty generally increases as more miners join to compete for rewards for adding novel blocks to the blockchain. The difficulty adjusts based on the number of vigorous miners, with more miners leading to increased competition.

Since the last halving in April 2024, miner rewards have essentially been halved, leaving many of them without a profit. For many smaller mining operations and even some large-scale players, this reduction in rewards led to concerns about profitabilitys because they now have to work harder and apply more computing power, while earning less in return. The lack of a significant boost in the price of Bitcoin over the past few months has made things even worse for Bitcoin miners, leaving many of them with no choice but to sell their holdings.

According to Data Santimenttotal amount of BTC held by miners dropped drasticallyInterestingly, according to the latest data, this amount has dropped from 2.23 million BTC at the end of July to around 2.14 million BTC.

Is the BTC rally officially over?

As Martinez noted, miner sell-offs have been ramping up over the past 72 hours. Such large-scale selling by miners could put significant downward pressure on the price, further complicating Bitcoin’s efforts to recover.

It is essential to remember that the miners’ surrender is not the only factor to set an official end to the Bitcoin rally. Bitcoin price has apparently been stuck in a correction phase for over two months, with many market participants already pulling back on hopes of a resumption of the uptrend. However, Bitcoin has mostly maintained above forceful support level of $50,000 despite various salesResumption of institutional capital inflow into the market could cause Bitcoin value to rise raising the rally and set a novel all-time high.

At the time of writing, the first step is to break above $60,000. Bitcoin is currently trading at $57,960 and is up 2.4% in the last 24 hours.

Featured image created with Dall.E, chart from Tradingview.com