Hash Ribbons signal end of miner capitulation: CryptoQuant

The Bitcoin (BTC) Hash Ribbons indicator, a metric that uses 30-day and 60-day moving averages to measure difficulty and financial challenges for miners, has signaled the potential end of miner capitulation, according to data from CryptoQuant.

When the 30-day moving average of the indicator crosses over the 60-day moving average, this signals an end to miner capitulation, as miners shift to more efficient mining equipment and re-enter the market.

This often coincides with price bottoms for the scarce digital asset, according to the analytics firm, and offers an opportunity for investors to enter the market at a more advantageous price by carefully timing their entrance and buying the dip.

Mining difficulty reaches new all-time high

On Aug. 1, the Bitcoin mining difficulty, which is a measure of the computational power required to successfully mine a single Bitcoin, reached a new all-time high, hitting 90.66 trillion. Since that time, the difficulty has adjusted down to 86.8 trillion—a slight improvement but still much higher than historic difficulty levels.

As expected, this increased difficulty eroded miner profit margins, causing the miner hashprice, a metric that measures miner profitability, to fall to record lows of under $36 petahashes per second (PH/s). Miner hashprice later rebounded to around $40 PH/s but even this level is dangerously close to historic lows.

Bitcoin miners diversify into other forms of high-powered computing services

The slow erosion of miner profit margins due to both increased computational power and a decreased block reward subsidy post-halving is driving miners to convert a portion of their mining operations to artificial intelligence and high-powered computing services.

In July, Bitcoin mining company TeraWulf announced it was diversifying operations into high-performance computing and AI data centers through the construction of a new facility at the company's Lake Mariner site, allocating 2 megawatts of power for the company's initial foray into data center services.