According to recent data from CryptoQuant, the Bitcoin mining industry is showing signs of "capitulation," a potential indicator that Bitcoin might be nearing a local price bottom before possibly surging to new highs. The market intelligence platform's Wednesday report analyzed metrics related to miners, who secure the Bitcoin network in exchange for newly issued BTC.

One significant sign of capitulation is a notable decline in Bitcoin's hash rate, which represents the total computational power securing the network. After reaching a record high of 623 exahashes per second (EH/s) on April 27, the hash rate has since fallen 7.7% to 576 EH/s, the lowest it has been in four months.

Historically, such a drawdown in hash rate has been linked to conditions where Bitcoin's price bottoms out. For instance, a similar 7.7% hash rate decline occurred in December 2022, when Bitcoin's price hit $16,000 before increasing by over 300% in the following 15 months.

This recent decline in hash rate follows Bitcoin's fourth cyclical "halving" event in April, which reduced the number of coins paid out to miners by half. According to CryptoQuant's miner profit/loss sustainability indicator, this halving has left many miners "extremely underpaid" since April 20, leading them to shut down unprofitable mining machines. As a result, daily mining revenues have plummeted by 63% since the halving, when both Bitcoin's base block rewards and transaction fee revenues were significantly higher.

Amid these financial pressures, Bitcoin miners have been moving coins out of their on-chain wallets at an accelerated pace, suggesting they may be selling their BTC reserves. CryptoQuant noted that daily miner outflows have spiked to the highest volume since May 21.

This sell-off by miners, along with sales from Bitcoin whales and national governments, has contributed to Bitcoin's recent price pullback in June. The decline has also impacted Bitcoin's "hash price," a measure of miner profitability per unit of computational power. Currently, the average mining revenue by hash stands at $0.049 per EH/s, just above the all-time low of $0.045 reached on May 1.