Bitcoin Mining Faces Profit Crunch, But No Panic Selling

A new report by crypto analytics firm Alphractal reveals that Bitcoin miners are facing some of the lowest profitability levels in over a decade — yet have shown little sign of capitulation.

Despite declining revenues and increasing network strain, the industry appears to be in a phase of recalibration rather than panic.

Transaction Fees Drop to 12-Year Lows

According to Alphractal’s latest data, total transaction fees on the Bitcoin network have fallen to levels last seen in 2012. This decline is closely tied to reduced on-chain activity in the current cycle, which has significantly slashed miners’ earnings beyond the regular block rewards.

Sell Pressure and Hash Rate Signal Resilience

Alphractal highlights that the Miner Sell Pressure metric remains historically low. This indicates that miners, despite shrinking profit margins, are refraining from mass liquidation of their BTC holdings.

The report suggests that miners may be holding out for better market conditions, betting on future price appreciation.

Meanwhile, the network’s hash rate volatility has hit record highs. Alphractal attributes this to large-scale miners turning off ASIC hardware in response to tightening margins and subdued network demand.

Despite this, overall mining difficulty remains high, adding further pressure on miner operations and delaying a natural adjustment in computational requirements.

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A Period of Strategic Retrenchment, Not Capitulation

While mining operations face increased stress, Alphractal emphasizes that we are not seeing traditional signs of miner capitulation. Rather, this may be a transitional phase where miners redistribute hash power and optimize operations to adapt to a slower network environment.

Historically, miners tend to sell aggressively during price surges or spikes in on-chain usage. With Bitcoin trading steadily above $107,000 and usage subdued, Alphractal suggests the current phase is one of consolidation and strategic positioning rather than a bearish signal.

Kosta Gushterov

Kosta has been working in the crypto industry for over 4 years. He strives to present different perspectives on a given topic and enjoys the sector for its transparency and dynamism. In his work, he focuses on balanced coverage of events and developments in the crypto space, providing information to his readers from a neutral perspective.