It’s possible that Bitcoin could soon climb back above $100,000—if we’re to believe two recent research contributions and technical analyses from CryptoQuant. These insights focus on miner behavior and investor sentiment, both of which have historically played a big role in Bitcoin’s price movements.
Lately, Bitcoin miners have found themselves in a tough spot. According to CryptoQuant, miners’ profits have dropped so much that they’ve entered what’s called the “extremely underpaid” zone. This happens when the money they make from mining Bitcoin doesn’t cover their costs. Two big factors play into this: mining difficulty and Bitcoin’s price.
Since the fourth Bitcoin halving in April 2024, mining has become harder. Halving cuts the reward miners get for verifying transactions, so they’re earning less Bitcoin. At the same time, mining difficulty has increased because more miners are competing, which pushes the hashrate higher. The hashrate measures how much computing power is being used to mine Bitcoin. A higher hashrate means more competition.
But here’s the catch—while mining is getting harder and more expensive, Bitcoin’s price has dropped after reaching its recent all-time high. So, miners are spending more to mine Bitcoin, but they’re earning less from selling it. This has led many miners to start selling off their Bitcoin to cover costs. In fact, CryptoQuant points out that miner-to-exchange flows—the amount of Bitcoin miners are sending to exchanges to sell—have reached extreme levels.
When miners can’t keep up with costs and are forced to sell in large amounts, it’s called miner capitulation. Historically, when this happens, Bitcoin’s price has often bounced back in the mid-term. It’s like a reset button for the market. One way to keep an eye on this is through the Hash Ribbons indicator, which can signal when a major miner capitulation is about to happen.
Will Bitcoin Rebound After Extreme Fear?
Another interesting signal comes from looking at Binance funding rates. Funding rates are fees paid between traders in the futures market—positive rates mean people are bullish (expecting prices to rise), and negative rates mean they’re bearish (expecting prices to fall).
Recently, there was a big liquidation of long positions, which are bets that Bitcoin’s price will go up. Since then, investor sentiment has been stuck in fear mode. After Bitcoin hit its all-time high, funding rates started to drop, warning us that those liquidations might happen—and they did.
CryptoQuant’s research shows that in bull markets, Bitcoin often rebounds after funding rates turn negative due to large-scale liquidations. On most futures exchanges, Bitcoin’s price saw a small bounce after hitting negative funding rates but eventually corrected further. But Binance—which handles a huge chunk of global trading, especially from retail investors like you and me—tells a different story. (Futures exchanges are platforms where traders buy and sell contracts that bet on the future price of Bitcoin instead of the actual Bitcoin itself.)
On Binance, negative funding rates are less common, but when they do happen, Bitcoin’s price has often climbed back up sharply. This suggests that when fear takes over and people expect the worst, Bitcoin tends to do the opposite. Historically, Bitcoin has performed well when most traders are too scared to stay in the market.
So, what does this mean for us? If Bitcoin’s price drops further and pushes Binance funding rates into negative territory, we might see another rebound. Keeping an eye on these funding rates could give us a clue about when Bitcoin’s next move might happen.
In short, between miner capitulation and funding rate signals, there are hints that Bitcoin could bounce back after the recent declines. If these patterns hold true, we might even see Bitcoin pushing past the $100,000 mark again. Just a few percent increase in price is needed for that with Bitcoin trading at $97,500 currently according to CoinMarketCap data.
Keep following us at HowToBuyBitcoin.org for the latest news and updates on Bitcoin.