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Miner Capitulation

Miner capitulation is when Bitcoin miners, squeezed by falling prices or rising costs, switch off machines and sell some of their bitcoin. It usually shows up as a sharp drop in hash rate. Some analysts watch it as a sign of market stress, but it is not a buy or sell signal and does not predict prices.

How miner capitulation works

Miners earn new bitcoin and fees for each block they find. Their income per unit of computing power is called hashprice. It falls when the bitcoin price drops, when more hash rate competes or when a halving cuts the block reward. If it falls below power costs, older ASIC machines are switched off, and some miners sell bitcoin reserves to pay bills.

How is it measured?

One gauge is Hash Ribbons, published in 2019 by Charles Edwards of the investment firm Capriole. It flags capitulation when the 30-day average of Bitcoin’s hash rate falls below its 60-day average, and the start of a recovery when it crosses back above. Analysts also track bitcoin leaving miners’ wallets.

Does the difficulty adjustment stop it?

No. Every 2,016 blocks, the difficulty adjustment resets how hard blocks are to find, so they keep arriving about every 10 minutes. That helps the remaining miners but does not stop others switching off or selling.

Example

The explorer mempool.space (checked September 2026) shows three episodes:

  • Late 2018. As the bitcoin price fell, the 30-day average hash rate stayed below the 60-day average from 31 October 2018 to 11 January 2019. Difficulty fell 15.1% on 3 December 2018.
  • Mid-2022. After another steep price fall, the 30-day average mostly stayed below the 60-day average from about 10 June to 20 August 2022.
  • After the April 2024 halving. The block subsidy fell from 6.25 to 3.125 BTC, and the 30-day average mostly stayed below the 60-day average from mid-May to late July 2024.

Past performance does not predict future results.

Why it matters when you buy crypto

Some analysts read miner capitulation as a sign of market stress. It is narrower than capitulation, which means panic selling by holders in general. It is not a buy or sell signal. See the Bitcoin price and payment options.

Risks and red flags

  • The data is an estimate. Different sources can date the same episode differently.
  • It does not mark price lows. Be wary of claims that one indicator proves the bottom is in.

Nobody can know. Hash Ribbons and similar indicators show what miners have already done, not what the price will do next.

It varies. The three episodes above each lasted about ten weeks; several others since 2019 lasted about a month.

Go deeper: What is cryptocurrency mining? For hash rate history up to 2019, see Bitcoin hash rate explained.

Related terms

  • Capitulation Capitulation is a burst of heavy, panicked selling in which many holders give up at once, driving prices down sharply on very high volume.
  • Difficulty Adjustment Bitcoin's difficulty adjustment is an automatic rule that makes mining harder or easier every 2,016 blocks so new blocks keep arriving about every 10 minutes.
  • Halving Roughly every four years, or every 210,000 blocks, the number of new bitcoins created in each block is cut in half.
  • ASIC (Application-Specific Integrated Circuit) An ASIC (application-specific integrated circuit) is a chip built for one task.
  • Hash Rate Hash rate is the number of hash calculations that miners on a proof-of-work network, such as Bitcoin, perform every second.

Go deeper

Sources

  1. Capriole: Hash Ribbons & Bitcoin Bottoms (30 October 2019) (accessed )
  2. mempool.space: Bitcoin hashrate and difficulty (accessed )
  3. Bitcoin Developer Documentation: Block Chain Guide (difficulty adjustment) (accessed )