The computational power of the Bitcoin network is under significant pressure. According to James Van Straten, the Bitcoin hashrate has experienced an approximate drop of 15% since its peak recorded last October. This decline indicates that miners are powering down equipment because their profit margins are shrinking considerably in the current environment.
The average computational power metric securing the network has decreased notably. It went from around 1.1 zettahashes per second (ZH/s) in October to approximately 977 exahashes per second (EH/s) currently. This reduction confirms that operators are disconnecting their machines, a phenomenon known as capitulation, as the profitability of mining activity deteriorates rapidly.
As a direct consequence of this equipment disconnection, mining difficulty will automatically adjust downward. A 4% drop is forecast for January 22, which would mark the seventh negative adjustment in the last eight periods. Furthermore, Glassnode’s Hash Ribbon metric inverted on November 29, shortly after the price bottomed near $80,000, signaling financial stress in the sector, which forces asset sales to fund operations.
Does this miner capitulation represent a contrarian buy signal for the market?
Historically, these periods of sustained stress among miners often precede renewed price momentum. As VanEck notes, capitulation is seen as a contrarian signal: inefficient miners exit the market and selling pressure eventually exhausts. The market expects the 30-day moving average of hashrate to cross back above the 60-day average to confirm the end of the worst phase of this trend.
On the other hand, current selling pressure comes not only from covering basic operating costs. Some major mining companies, such as Riot Platforms, are selling their bitcoin holdings to fund capital-intensive investments. This strategic pivot toward artificial intelligence and high-performance computing is contributing to short-term price pressures on the leading cryptocurrency in the market.
The mining ecosystem is going through a critical moment of restructuring where only the most efficient operators manage to stay afloat. The combination of narrow margins and the need for liquidity has created a challenging environment that has now extended for almost two months. The disconnection of less profitable hardware is a natural response of the market to seek a new operational equilibrium.
Finally, attention focuses on the next difficulty adjustment and the stabilization of the Bitcoin hashrate. If the capitulation trend shows signs of exhaustion in the coming weeks, it could be interpreted as a solid base for a future price recovery, once the immediate selling pressure from miners has been absorbed by the market.
