A great deal of analysts and traders’ focus is fixated on investors. However, when the market moves, it not only affects investors, but the miners as well. June’s crash had a rather profound impact on miners, opening up buying opportunities for the market.
Bitcoin miners take a leave
The most noticeable change on the miners’ end during a changing market comes when their profitability is impacted. The almost 40% decline that Bitcoin witnessed last month did exactly that as the fall in price triggered a fall in profits too. These were crucial for miners to cover their cost of operations.
The previous dips that pulled BTC to $30k before the June crash had already brought some miners to the brink of collapse. Bitcoin falling to $19k did the rest.
Bitcoin price action | Source: TradingView – AMBCrypto
The same can be observed when looking at the network’s hash rate as well. After peaking at its all-time high level of 230 EH/s, it declined by 16.08% in just one month to touch 193 EH/s at the time of writing.
Ergo, miners have been holding off on mining since Bitcoin falling to an almost 20-month low was bound to bring losses.
Bitcoin Hash Rate | Source: Glassnode – AMBCrypto
However, this opened up more avenues of profits for the miners that are still operating. These miners are either flush with resources and are ready to continue mining, despite losses. It’s that, or they are in zones where the cost of mining is far lower than Bitcoin’s price after the crash.
The Puell Multiple backs the same as the indicator is currently highlighting low values. It’s now sitting in the green zone, which it last visited 26 months ago in May 2020.
The aforementioned zone is an indication of miners’ reduced selling, especially since the exit of some miners keeps others far from losses.
Bitcoin Puell Multiple | Source: Glassnode – AMBCrypto
Naturally, it doesn’t impact the liquid supply by a lot. It would be far more severely affected had Bitcoin been at its highs, placing Puell Multiple above 2.
On the contrary, this also serves as a positive buy signal for other investors since Bitcoin is preparing for recovery. Hints were visible today when the broader market closed in the green, pushing BTC above $21.5k at press time.
