Is Bitcoin Miner Capitulation A Golden Opportunity?

"The Bitcoin network's total computational hash rate has entered a notable downtrend since October 18th, reversing what has otherwise been a consistent multi-year climb. The hash ribbons indicator, which compares the 30-day moving average of hash rate against the 60-day moving average, has turned red, indicating miner capitulation. When the longer-term moving average crosses above the shorter-term one, it signals that miners are withdrawing computational power from the network, typically because profit margins have become too thin to justify continued operations at previous levels."

"The Puell Multiple, which measures daily USD earnings for miners relative to their 365 day moving average, recently collapsed to approximately 0.67. This means miners are earning only two-thirds of their yearly average revenue. The metric reveals a concerning trend, as Bitcoin has matured and the network has grown, mining economics have become increasingly compressed. Bitcoin Miner Revenue Under Pressure A deeper issue lies in the composition of miner revenue."

"Bitcoin miners derive income from two sources: block subsidies and transaction fees. The current block subsidy stands at 3.125 BTC per block, representing the lion's share of miner revenue. However, transaction fees, which could theoretically offset declining subsidies over time, have entered a long-term downtrend throughout this cycle. When measured in USD terms, miner fee revenue is now practically negligible compared to the block subsidy. This creates an uncomfortable math problem. The block subsidy decreases by 50% every four years at the halvin"

Network computational hash rate has declined sharply since mid-October, reversing years of growth and activating the hash ribbons indicator that signals miner capitulation. The Puell Multiple fell to about 0.67, indicating miners now earn roughly two-thirds of their one-year average revenue and that mining economics are increasingly compressed. Miner revenue is dominated by the block subsidy, currently 3.125 BTC per block, while transaction fees have trended lower and are negligible in USD terms. Declining subsidies combined with weak fee income create a structural profitability challenge for miners as subsidies halve periodically.

Read at Bitcoin Magazine