Bitcoin Miners Crisis Signal Technical Ribbon: Hashrate Slumps Amid Delivery Momentum

The computing power of the Bitcoin network, known as the hashrate, has declined significantly by 15% from its peak last October. This decline reflects a sustained wave of miner handovers, along with continued deteriorating profit margins and increasing operational pressures in the crypto mining sector.

Glassnode’s Ribbon technical indicator, which tracks miners’ capitulation trends through a comparison of short-term and long-term hashrate moving averages, had shown a reversal of direction on November 29. This signal appeared shortly after Bitcoin touched a low around the $80,000 level, signaling that the extreme surrender phase may have entered a consolidation stage.

Falling Network Computing Power and Momentum of Miners’ Bankruptcy

On-chain data shows that the average computing power securing the Bitcoin blockchain has slumped from a range of 1.1 zettahash per second (ZH/s) in October to around 977 exahashes per second (EH/s) today. This decline indicates that mining operators are massively decommissioning their equipment, forced to give up due to deteriorating profitability.

This situation reflects the economic reality that the mining industry is difficult to face. When subsidized block revenues are reduced and operating costs remain high, miners are forced to make difficult decisions: continue operations at negative margins or temporarily shut down the machine until market conditions improve. The latter option becomes more attractive as network difficulty also decreases, showing the domino effect of the departure of small- and medium-sized mining players.

With BTC now trading at $83.92K at the time of writing, the pressure continues despite an improvement from last month’s low. Nevertheless, short-term volatility patterns continue to test the resilience of the remaining mining operators.

Glassnode Tape Reverse: A Counterpoint Signal for Price Recovery

The reversal of the Ribbon on November 29 is seen by analysts as a potential counter-signal signal. VanEck noted in his analysis that periods of sustained pressure on miners have historically preceded new Bitcoin price momentum as inefficient miners exit the market and selling pressure eventually wears off.

When Ribbon reverses, this usually happens when the 30-day average hashrate movement exceeds the 60-day average. This condition has historically often coincided with price action improvements, as it suggests that the worst phase of miner handovers has passed and surviving players are starting to rebuild their capacity or holdings.

The logic behind these counter-signals is simple yet powerful: when miners are forced to sell Bitcoin to finance operations, they add short-term supply pressure to the market. However, once this pressure subsides and inefficient miners exit, the remaining supply from mining activities decreases, eliminating a suppressive factor on prices.

Difficulty Continues to Decrease: Seven Negative Adjustments in the Last 8 Cycles

The automatic mining difficulty adjustment to keep the block time close to 10 minutes shows a steadily weakening trend. Hardship is scheduled to fall by another 4% on Jan. 22, to about 139 trillion, a figure that marks the seventh negative adjustment in the last eight adjustment periods.

This downward trend in difficulty amplifies the pressure felt by the mining industry. Any negative adjustment provides temporary relief to the surviving miners, but it also indicates reduced network scalability and the potential weakening of the security of blockchain infrastructure if this trend continues for longer.

However, the positive aspect is that this consecutive negative adjustment creates a floor for further miner withdrawals. At some point, marginal profitability will return positive with the difficulty level dropping and inefficient operators exiting the system.

Miners’ Exodus Towards AI: Additional Sales Pressures from Capital Migration

An additional phenomenon that reinforces short-term pressures is the migration of large-scale miners to the AI and high-performance computing (HPC) sectors. Companies like Riot Platforms (RIOT), one of the largest Bitcoin miners listed on American exchanges, are actively selling Bitcoin to fund capital-intensive AI and HPC infrastructure investments.

This strategy reflects rational economic calculations: miners see a more attractive long-term ROI in AI computing infrastructure than traditional Bitcoin mining under current market conditions. However, from a micromarket perspective, their Bitcoin selling activity contributes to short-term price pressure and adds to the bearish momentum.

This transition also marks a fundamental shift in the industry: miners are no longer players who focus purely on a single asset, but rather operators of diversified computing infrastructure. This trend is likely to continue if Bitcoin mining profit margins remain compressed.

Other Markets Show Different Dynamics

While Bitcoin is facing pressure from the expansion of miners’ offerings and negative difficulty adjustments, other crypto assets are showing a different pattern. XRP, for example, has declined by about 4% this month with the current price at $1.79. However, on-chain data shows investor interest is strengthening: the U.S.-listed spot XRP ETF has attracted a net inflow of $91.72 million this month, a trend that is in stark contrast to the continued outflow of Bitcoin ETFs.

This divergence suggests that macro pressures on Bitcoin miners are not fully evenly distributed across the crypto ecosystem, with some alternative assets undergoing more moderate valuation recalibrations.

Ahead: Waiting for the Formation of the Submission Floor

Current conditions put Bitcoin and the mining industry at a critical crossroads. The Ribbon Glassnode has reversed, the contraction signal has been recorded, but the pressure still continues from negative difficulty adjustments and miner capital migrations. This flash point zone will determine whether the surrender phase has really reached its peak or if there is still further pressure awaiting.

For investors, the reversing Ribbon signal offers valuable insights into the extreme conditions of the market. However, reversals of technical indicators do not always directly translate to price increases; It often takes time and volume to confirm a change in momentum. The upcoming period will show whether the rally from these November-January lows can hold up against its fundamental challenges, or whether miners’ pressures will intensify again before true stabilization is achieved.