Miner capitulation is a contrarian signal, indicates renewed bitcoin momentum, VanEck says
VanEck data shows declining bitcoin mining activity has historically preceded strong returns in bitcoin.
What to know:
VanEck data shows that in the past 30 days bitcoin’s hashrate dropped by the most since April 2024
Hashrate declines are historically aligned with miner capitulation and markets closer to local bottoms than tops.
According to VanEck, periods of negative 90-day hashrate growth have delivered positive 180-day bitcoin returns 77% of the time.
Declining bitcoin BTC$87,557.99 mining activity is often interpreted as a sign of network stress, reflecting weaker miner profitability, declining hashrate and concerns over the economic sustainability of mining operations. It is commonly assumed to be bad for the bitcoin price.
Digital assets investment firm VanEck, however, argues that periods of falling hashrate — the total computational power being used by miners to secure the bitcoin network and process transactions — has historically functioned as a contrarian indicator, indicating improving price momentum rather than a signal of structural weakness.
This dynamic is emerging as bitcoin trades around $87,000, following a 36% peak-to-trough slide from the October's all-time high.
Over the past 30 days, bitcoin's network hashrate recorded its steepest decline since April 2024, as miners faced compressed margins from a weaker BTC price and that month's "halving," an event that cuts block rewards by 50% roughly every four years, reducing new bitcoin issuance.
