These Bitcoin Metrics Signal A Capitulation Event Is Near

Jake Simmons

1 year ago

2 mins read

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Several metrics currently suggest that the Bitcoin price is finally finding its bottom after another capitulation event, possibly triggered by the Genesis/ DCG/ Grayscale saga.

This final miner capitulation may be imminent as miners are selling their BTC at the fastest rate since early 2016. In light of the new bear market low, some Bitcoin miners are currently going through arguably the most difficult time ever.

The BTC price fell to a new bear market low yesterday at $15,478, putting it in no-man’s land. At the time of writing, Bitcoin was trading just above the low, at $15,678.

BitcoinBTC USD 2022-11-22 — Bitcoin trading near yesterday’s new bear market low. Source: TradingView

According to Charles Edwards, founder of the Capriole Fund, selling pressure among BTC miners has skyrocketed 400% in the last three weeks. As a result, a ” Bitcoin miner bloodbath” is currently playing out.

Miners are selling their Bitcoins more aggressively than they have in seven years. “If the price doesn’t go up soon, a lot of bitcoin miners are going to give up,” the fund manager stated, adding:

What we are currently seeing is not sustainable. Mine-and-hodl is not a viable strategy as a bitcoin miner. Miners are paying the consequences of the “never sell” arrogance that was prevalent just 6 months ago. They need to constantly manage (trade) their bitcoin position in this market.

Bitcoin miner capitulation incoming. Source: Twitter

Data from Glassnode backs up Edwards’ claims. They show that miners’ total balances fell to a 10-month low this week.

This is due to miners being forced to sell some of their BTC to cover their running costs at the current very low price. Their holdings are now worth about $30.4 billion, which is still almost 10% of Bitcoin supply.

Bitcoin miners are currently facing multiple challenges. The hash rate is near an all-time high, as well as the mining difficulty.

Ultimately, numerous miners are suffering from the sharp rise in energy prices. All together, plus the weak Bitcoin price, are best breeding ground for a renewed miner capitulation. However, Edwards is also seeing a huge opportunity in this scenario.

“All prior Bitcoin cycles had bottomed by this point in the halving cycle. We have less than 100 days until all the other cycles went vertical. I am getting very excited,” Edwards wrote via Twitter.

This is historically the optimal time to allocate to Bitcoin. All prior Bitcoin cycles had bottomed by this point in the halving cycle. We have less than 100 days until all the other cycles went vertical. I am getting very excited. Not investment advice. pic.twitter.com/O7BJr5qomz

— Charles Edwards (@caprioleio) November 22, 2022

Lead on-chain analyst at Glassnode, Checkmate, outlined that the profit/loss ratio of all BTC that moved last week is massively negative. “Less than $80m in profits, while $4.3B in losses booked. Capitulation.”

Meanwhile, Will Clemente, co-founder of Reflexivity Research emphasized that Bitcoin is doing well in the long-term, citing four key metrics. Clemente said long-term holders continue to buy BTC.

Despite massive unrealized losses, the largest ever, the supply of long-term holders is at an all-time high. Ultimately, blocks continue to be added while active addresses reach new higher lows.

Jake Simmons

Jake Simmons, a dedicated crypto journalist, has been passionate about Bitcoin since 2016 when he first learned about it. Through his extensive work with NewsBTC.com and Bitcoinist.com, Jake has become a trusted voice in the crypto community, guiding newcomers and seasoned enthusiasts alike towards a deeper understanding of this dynamic field.

His mission is simple yet profound: to demystify Bitcoin and cryptocurrencies and make them accessible to everyone.
With a professional career in the Bitcoin and crypto scene that began right after graduating with a degree in Information Systems in 2017, Jake has immersed himself in the industry. Jake joined the NewsBTC Group in late 2022. His educational background provides him with the technical prowess and analytical skills necessary to dissect complex topics and present them in an understandable format. Whether you are a casual reader curious about Bitcoin or an investor seeking to navigate the latest market trends, Jake’s insights offer valuable perspectives that bridge the gap between complex technology and everyday usage.

Jake is not just a reporter on technological trends; he is a firm believer in the transformative potential of Bitcoin over traditional fiat currencies. To him, the current financial system is on the brink of chaos, propelled by unchecked government actions and flawed Keynesian economic policies. Drawing from the principles of the Austrian school of economics, Jake views Bitcoin not merely as a digital asset but as a crucial step towards rectifying a failing monetary system. His libertarian views reinforce his stance that just as the church was separated from the state, so too should money be freed from governmental control.

For Jake, Bitcoin represents more than just an investment; it's a peaceful revolution. He envisions a future where Bitcoin fosters a sustainable and responsible financial framework for generations to come. His advocacy is not about opposition but about evolution, about laying the groundwork for a system that prioritizes transparency and equity over secrecy and inequality.

As a journalist, Jake’s articles are crafted with the precision of a scholar and the passion of a true believer. He provides not only news but also thoughtful analysis that connects the dots between daily developments and larger economic theories. His work is a beacon for those lost in the technical jargon often associated with crypto discussions, illuminating the practical implications and benefits of these technologies.

In summary, Jake Simmons is not just reporting on a revolution; he wants to be part of it, fully committed to enhancing public understanding and adoption of Bitcoin and cryptocurrencies. His work is more than just a collection of articles; it’s a resource, a guide, and a companion for anyone ready to explore the potential of this digital frontier. Whether you are taking your first steps into crypto or are a veteran looking to stay on top of the latest trends, Jake’s insights provide clarity and foresight in an often unpredictable industry. Join him on this journey to reshape the world of finance, one post at a time.

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