What To Know:
- VanEck said a roughly 4% drop in Bitcoin’s hashrate over the past month resembles past miner capitulation phases that have often preceded market recoveries.
- Historical data shows Bitcoin has posted stronger 90-day and six-month returns after periods of declining hashrate compared with phases of rising mining activity.
- Despite recent price weakness and softer on-chain metrics, long-term holders have increased accumulation, suggesting growing confidence during the mining slowdown.
VanEck says the recent slowdown in Bitcoin mining activity could be pointing toward a familiar phase in the market cycle ie., one that has historically preceded stronger price recoveries. Usually a decline in network hashing power raises concerns about miner stress and industry health, the investment firm argues that such periods have tended to mark attractive entry points for long-term holders.
VanEck on Bitcoin Mining Trends and Its Market Implications
In a report released Monday, VanEck’s head of crypto research Matt Sigel and senior investment analyst Patrick Bush highlighted a roughly 4% drop in Bitcoin’s hashrate over the past month. According to the firm, similar trends in the past have frequently coincided with what is known as miner capitulation, a phase when less efficient operators shut down due to falling profitability. VanEck views this dynamic as a contrarian signal that selling pressure may be nearing exhaustion.
Historical data backs up the argument, the report said. Since 2014, Bitcoin has delivered positive returns roughly 65 percent of the time in the 90 days following a 30-day decline in hashrate. By comparison, periods following hashrate increases produced positive 90-day returns about 54 percent of the time. Over a six-month horizon, the pattern becomes even more pronounced. When 90-day hashrate growth turned negative, Bitcoin posted positive six-month returns 77 percent of the time, with average gains of around 72 percent.
During periods of rising hashrate, Bitcoin still tended to move higher, but the performance was weaker. Positive six-month returns occurred about 61 percent of the time, with average gains closer to 48 percent. VanEck noted that, overall, average six-month returns were approximately 30 basis points higher during periods of falling hashrate than during periods of growth. The data also suggests that negative hashrate momentum has historically added about 2,400 basis points to six-month returns, making those phases materially better entry points.
The current decline in mining activity marks the sharpest monthly pullback since April 2024. On a 30-day moving average, Bitcoin’s hashing power is down around 4 percent. Part of that slowdown has been linked to developments in China’s Xinjiang region, where inspections by government officials reportedly led to the shutdown of about 1.3 gigawatts of mining capacity.
Jack Kong, former head of mining hardware firm Canaan, said China’s mining sector lost roughly 400,000 machines in a single day during the crackdown. That translated into an estimated reduction of about 100 exahashes per second in network hashpower. The impact was notable given that China had recently been disclosed as the world’s third-largest source of Bitcoin mining, accounting for about 14 percent of total hashrate.
Despite the disruption, Bitcoin mining remains geographically distributed. Estimates suggest at least 13 countries continue to play an active role in supporting mining operations. These include Russia, France, Bhutan, Iran, El Salvador, the United Arab Emirates, Oman, Ethiopia, Argentina, Kenya, and, more recently, Japan. The broad footprint has helped save the network from regional shocks, amidst strict individual jurisdictions control.
Still, the near-term market picture remains under pressure. Bitcoin’s price has fallen about 9 percent over the past 30 days, with volatility climbing above 45 percent, a level last seen in April 2025. On November 22, Bitcoin briefly touched around $80,700, pushing the 30-day relative strength index to roughly 32. Perpetual futures markets also reflected waning speculative demand, with annualized basis rates dropping to as low as 3.7 percent, well below the yearly average of 7.4 percent.
On-chain metrics paint a mixed picture. Hashrate slipped about 1% month over month, daily transaction fees fell 14 percent, and active addresses declined by roughly 1 percent. At the same time, data tracking long-term accumulation showed a more supportive trend. Over the past month, Bitcoin DATs increased their holdings by about 42,000 BTC, lifting total balances to roughly 1.09 million BTC. That marks the largest accumulation phase since mid-2025.
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