Bitcoin (BTC) miners have slipped into a capitulation phase, with profit margins under 5%, a pattern that traders say has marked past market bottoms.
Key Points:
- Bitcoin miners have entered the capitulation phase of the current bear market.
- Mining margins have dropped below 5%, a level historically tied to accumulation.
- One trader still expects a deeper low before the cycle turns.
Bitcoin Miners Hit Capitulation
Onchain figures shared this week pointed to mounting strain across the mining sector, with several gauges flashing levels last seen at prior cycle lows.
In a Thursday X post, pseudonymous trader Killa argued miners were capitulating, judging spot price against mining difficulty.
A chart from analytics platform Bitbo that tracks price relative to the last long-term difficulty low sits firmly in the red, repeating a setup from earlier downturns.
The reading lines up with thin margins.
"There isn't a clearer sign to start accumulating," Killa told followers, framing the stress as a buying window.
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Charles Edwards Cites Value
Charles Edwards, founder of quantitative fund Capriole Investments, pegged the average production cost near $61,200 and the electrical-cost floor at $48,965.
Those numbers leave miners with a margin of roughly 4.67%, close to two-year lows logged at the start of June.
By his read, the strongest long-term entries have historically sat between current prices and that electrical floor, a band the market is now testing as spot trades near $63,500.
"Miners are now just breaking even on average," Edwards wrote, tying the squeeze to a level that once rewarded patient buyers rather than sellers.
Bitcoin Miner Squeeze Deepens
Why it matters comes down to supply. When weaker rigs run at a loss, operators face a choice between absorbing the hit or selling reserves, and forced selling can drag price discovery lower.
Killa cautioned that the bottom may not be in, warning legacy markets could correct later this year and set the final pivot low.
The pressure has built for weeks. Daily revenue per terahash slid to about $0.28, down from $0.39 a month earlier, while miners trimmed holdings and some shifted power toward AI data centers. Bitcoin last traded below production cost for stretches in 2019 and 2023, spells that preceded eventual recoveries.
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