The crypto markets have been stagnant and the price of BTC is now at risk of additional decline, as the struggle to maintain a level over major hurdles continues. As the price decreases, it increases the possibility of the occurrence of what is known as “miner capitulation”. It was said that it caused the huge decline in the price of BTC in Dec. 2018.

In the end of 2018, the price declined from close to $6,000 to levels around $3,000s.

The occurrence of miner capitulation in the Bitcoin market is because of unprofitable mining. When profitability decreases, miners normally sell their BTC, leading to capitulation due to worsening market sentiment. Such sales bring about remarkable bearish market pressure, thereby creating a difficult domain for leading cryptos such as BTC in maintaining their momentum.

It is not likely that Large mining centers and firms will capitulate because of a short-term price decline, due to their long-term contracts with electricity providers. Likewise, there is more capital for them to cope with market instability for a long time.

However, there is likelihood of smaller mining firms to capitulate in short-term. If major mining companies start to close down, it may lead to a death spiral that will take the hash rate of the network of BTC to near-zero.

In previous times, Andreas Antonpoulos said it is unlikely for such death spiral or an abrupt drop in the hash rate to happen due to the operation of miners with long-term outlook and approach.

Therefore, the occurrence of short-term miner capitulation as in late 2018 makes the market to attempt recovery within six months to a year. At the moment, it is too early to say whether miner capitulation will happen this year. Nevertheless, a continued negative market sentiment to the first quarter of 2020 may bring about capitulation in the upcoming months.

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