The Battle for Profitability Miners and Holders Struggle as Bitcoin Reaches 65000

In the recent downturn of Bitcoin’s price below $65,000, analysts are attributing part of the decline to Bitcoin miners selling off their reserves.
Since October, miners have sold more than 30,000 BTC, marking the longest distribution phase seen since 2017 and creating challenges for the cryptocurrency.
The ongoing miner profitability crisis, called miner capitulation, is being viewed by some as a potential signal of a market peak, while others see it as an opportunity to buy if the hashrate recovers.
Despite the price drop, research indicates that the majority of Bitcoin holders are still in a profitable position, with over 87% of the circulating supply held at a profit.
The current Bitcoin market cycle does not seem to be dominated by retail investors yet, suggesting room for further growth, but anxiety among holders remains.
As Bitcoin struggles to stay above $65,000, analysts are considering various factors influencing the recent price decline.
One theory gaining traction is the selling pressure from Bitcoin miners, who have offloaded over 30,000 BTC since October 2022.
On-chain analyst James Van Straten notes that this distribution phase is the longest miners have experienced since 2017, adding to the challenges faced by the leading cryptocurrency.
The selling pressure is believed to stem from profitability concerns, especially among less efficient miners following the halving event in April, which cut the block reward in half.
The ongoing miner profitability crisis, known as miner capitulation, is a topic of discussion among market experts.
Some, like Quinn Thompson from Lekker Capital, see the current situation as a “top indicator for crypto” and consider it more severe than the miner crisis during the 2022 crypto winter.
Others, such as analyst Willy Woo, believe that Bitcoin’s price will continue to suffer until the hashrate improves.
Despite worries about miner capitulation, data from Glassnode suggests that most Bitcoin holders are still in a profitable position.
Glassnode’s latest report, The Week On-Chain, reveals that over 87% of the circulating supply is held at a profit, with a cost basis lower than the current price.
The market value to realized value (MVRV) metric shows that, on average, BTC is still up by over 120% compared to its purchase price in USD terms.
Glassnode also highlights that the market is mostly controlled by long-term holders, providing strong price support, and with few short-term holders, a sudden shift to a bear market is less likely, leaving room for a potential rally before a cycle top is formed.
However, not all indicators are positive for Bitcoin. Data from Santiment shows that BTC holders experienced the largest 3-day drop in non-empty wallets during the recent price decline.
This could lead traders to sell off their holdings out of fear of further price drops, adding to the selling pressure in the market.