Bitcoin (BTC) Miners Could Be Profitable Soon, Which Could Rally BTC

Bitcoin (BTC) miners have recorded slight relief on their margins. This comes after a massive decline following the April halving, which cut revenues (block rewards) in half.

Bitcoin (BTC) miners are experiencing some relief in their margins following a steep decline post-April halving, which slashed revenues (block rewards) in half.

According to CrypoQuant analyst Axel Adler, the average daily revenue for BTC miners slid from a peak of $74 million in May to above $30 million in July.

For perspective, miners now receive 3.125 BTC as block rewards compared to 6.25 BTC before the April halving, excluding transaction fees.

Despite the الكبير improvement in average revenue for BTC miners, as seen by a slight bounce above $30 million daily, most miners were still not making a profit at the last check.

In fact, profitability has been a concern following the reduction in block rewards during the April halving event. Since April, the average mining costs have been higher than the BTC price, as indicated by data from MacroMicro.

Interestingly, the gap between mining costs and BTC prices decreased in May but widened again in June. In July, the gap has narrowed significantly, suggesting that BTC miners may be close to being profitable again.

On 29 July, the average mining cost was $73.6K, while the BTC price stood at $68.2K. This translates to an average loss of over $5,000 to mine a single BTC on that day. Mining costs include expenses for operating mining rigs, energy consumption, among others.

Struggling miners may be forced to sell off their previously mined BTC to cover operational costs. If a large number of miners sell BTC to cover their expenses, it could put downward pressure on BTC prices.

The Miner-to-Exchange Flow serves as an indicator to gauge sell pressure from BTC miners. An increase or spike in the metric indicates that more BTC from miners were moved to centralized exchanges for sell-offs, which could drag the BTC price.

On the other hand, a decrease in the metric suggests that miners are withdrawing their BTC from exchanges, which signals a bullish scenario for BTC due to reduced sell pressure from miners.

As illustrated in the attached CryptoQuant chart, we can observe the scenario playing out. The Miner to Exchange Flow dropped slowly from 1 to 20 July, which corresponds to a rally that saw BTC briefly reclaim $60K and surged past $66K.

An uptick in the metric from 20 to 24 July saw BTC briefly retrace as more BTC were being dumped into exchanges by miners. However, Miner-to-Exchange Flow has declined sharply since last Friday, reinforcing a bullish sign for BTC as it approached $69K.

At current market prices, miners collectively hold an estimated 1.81 million BTC in reserve, valued at over $124 billion. This supply can have a substantial impact on BTC prices.

Nevertheless, recent data seems to indicate that miners are close to being profitable again and are refraining from selling off their BTC, which could provide some much-needed support for BTC to climb higher.