Since Bitcoin BTC -3.15% 's latest halving event on April 19, which cut the reward for mining a new bitcoin block in half, the world's largest cryptocurrency has begun showing signs of miner capitulation as miners likely turn off underperforming machines and begin to sell bitcoin to hedge their exposure.

There are various signs of miner capitulation, which historically has indicated a bottom in prices, according to CryptoQuant, which notes that for most of the period since April, miners have been "extremely underpaid" according to the data provider's metrics.

The CryptoQuant report notes total daily revenues for miners have decreased from $79 million on March 6 to $29 million currently. While the excitement around the Ordinals and the novel Runes protocol initially generated tens of millions in fees for the network, CryptoQuant notes the revenue from transaction fees has fallen to only 3.2% of the total daily revenues, the lowest share since April 8.

Following bitcoin's halving, older processors are no longer as profitable as newer-generation machines, which likely means some miners are disconnecting machines from the network.

According to CryptoQuant's data, after hitting a record-high hashrate on April 27, the network's hashrate has experienced a 7.7% drawdown and is currently nearing a four-month low. In addition, spikes in miner outflows indicate that some may be selling their coins to hedge their exposure.

As the three-month anniversary of the halving approaches, the supply of bitcoin active within 90 days has begun to notably decrease compared with other timeframes, according to The Block's data. The reduction in volume may be another pain point for miners hoping that transaction fees would offset the reduction in block rewards.

Bitcoin mining companies, however, appear to be taking the changes in stride, investing in newer processors and securing energy contracts across the globe.

As CryptoQuant notes, miner capitulation has historically been associated with a bottom in prices. The last comparable hash rate drawdown occurred following the collapse of FTX in November 2022, when bitcoin's price fell below $17,000 but thereafter began its ascent in price.

The price of bitcoin is hovering around $60,000 at publication time, having fallen about 3.5% in the past 24 hours, according to The Block's Bitcoin price page.

Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.

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