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Bitcoin (BTC) miners are sending record amounts of BTC to centralized cryptocurrency exchanges.
In a June 27 tweet, networking analytics platform Glassnode reported a record high level of earnings for Bitcoin miners sent to exchanges.
He noted that there is currently an “extremely high exchange” from Bitcoin miners who have sent a record $128 million to exchanges in the past week. This is equivalent to 315% of their daily revenue, the analytics platform notes.
There were several spikes in earnings of miners sent to exchanges during the 2021 bull market as they took profits. Late 2022 also saw an influx of capitulations as the markets reached the bottom of the cycle.
However, this latest surge greatly eclipsed them all.
Usually, when miners send BTC profits to exchanges, they prepare to cash out to cover their costs and lock in profits.
Last week would have been a good time to do so, as BTC hit its highest price in a year on June 24, hitting $31,185.
At the time, CryptoQuant co-founder and CEO Ki Yong-ju echoed the sentiment, stating that the current price-to-earnings ratio was “attractive to sell to miners.”
However, Bitcoin prices are yet to be affected as the asset remains slightly above the $30,000 threshold at press time.
However, the current $31,000 price zone is the main resistance level for BTC and the markets failed to overcome it in mid-April and again at the end of June. If the bulls fail to reach a new level, future losses are expected, especially if the miners start to liquidate.
The profitability of Bitcoin mining, or the price of hashing, has risen slightly over the past week due to the rise in the price of BTC. According to HashrateIndex, it is currently 0.076 TH/s (terahashes per second) per day.
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Despite the fact that the price of bitcoin has increased by more than 88% since the beginning of the year, miners still face some serious problems. Profits have fallen over 30% since last July and are down over 80% since the peak of the 2021 bull market.
Combined with a near-record hash rate of 377 EH/s and peak difficulty levels, bitcoin miners still face an uphill battle.
The increase in hashing speed and difficulty, combined with higher energy prices, has put downward pressure on mining profitability. This means that selling their hard-earned Bitcoins can be a nasty necessity to cover expenses.