Bitcoin miners are currently facing significant financial strain, particularly following the fourth halving event. Consequently, these essential participants in the network are compelled to sell off their BTC holdings to cover rising operational expenses.

Recent on-chain data reveals a wave of miner capitulation in the Bitcoin market reminiscent of December 2022, shortly after the collapse of FTX. The key question now is how this historical event could impact the current market cycle.

Is Bitcoin Set to Resume its Bullish Trend?

Julio Moreno, head of research at CryptoQuant, recently highlighted that Bitcoin miner capitulation has reached levels similar to those seen in December 2022. This period marked the trough of the previous cycle post-FTX collapse.

The downfall of the Sam Bankman-Fried-led exchange was a pivotal moment for the crypto industry, triggering widespread panic and massive sell-offs. This selling pressure led to a sharp decline in Bitcoin's price.

During the previous miner capitulation in December 2022, there was a 7.6% reduction in the Network True Hashrate. Currently, according to Moreno's analysis, the Network True Hashrate Drawdown stands at -7.6%.

The Network True Hashrate Drawdown metric measures the decline in computational power dedicated to Bitcoin mining, reflecting miners' struggles amid tough financial conditions. This significant drawdown and subsequent miner capitulation could potentially exert considerable downward pressure on Bitcoin's price, driving it lower.

However, historical data suggests that periods of substantial miner capitulation often precede market recoveries. As observed previously, Bitcoin's market bottom coincided with similar levels of Network True Hashrate Drawdown in December 2022, indicating a possible imminent rebound in BTC's price.

Bitcoin Price Overview

At present, Bitcoin is trading around $60,889, marking a slight 0.2% increase in the past 24 hours. Despite this daily gain, the cryptocurrency remains in negative territory for the week, with a decline exceeding 5%.