Bitcoin Miner Stress Eases as BTC Holds Bullish Structure Amid Profit-Taking

Introduction: Bitcoin’s Resilience Amid Miner Capitulation and Profit-Taking

Bitcoin (BTC) has shown signs of resilience despite ongoing miner stress, profit-taking by long-term holders, and weakening scarcity metrics. The Hash Ribbons indicator continues to signal miner capitulation, historically a precursor to bullish reversals. Meanwhile, BTC’s price remains within an ascending channel, supported by key technical levels and oversold momentum indicators.

While long-term holders are cashing out at elevated levels—evidenced by the Spent Output Profit Ratio (SOPR)—futures traders remain cautiously optimistic, as seen in positive funding rates. Additionally, Bitcoin’s Stock-to-Flow (S2F) ratio has declined sharply, raising questions about scarcity dynamics. However, if miner stress subsides and key support holds, BTC could be poised for a rebound.

Hash Ribbons Signal Miner Stress—But Recovery May Be Near

Since June 25th, the Hash Ribbons indicator has flashed a persistent miner capitulation signal. This occurs when the 30-day moving average (MA) of Bitcoin’s hashrate falls below the 60-day MA, indicating that miners are struggling to remain profitable. Historically, such signals have often marked accumulation phases before significant price recoveries.

At press time, Bitcoin was trading at $116,228, down 1.84% in 24 hours. If past patterns hold, the current miner stress could soon ease, potentially leading to a market rebound. Miners may halt large-scale sell-offs once profitability improves, reducing downward pressure on BTC’s price.

Historical Context: Miner Capitulation and Price Reversals

• In 2022, prolonged miner stress preceded Bitcoin’s recovery from its bear market lows.
• Similar signals in 2019 and 2020 were followed by strong bullish trends after miners stabilized operations.

BTC Holds Bullish Structure Despite Sharp Pullback

Bitcoin recently retreated from the $122,000 resistance zone, but its broader uptrend remains intact. The price continues to trade within an ascending channel, with critical support near $112,000. A breakdown below this level could trigger panic selling, but for now, the structure remains bullish.

The Stochastic RSI has dipped below 20, indicating that BTC is deeply oversold and may soon see a reversal. However, traders should monitor whether bulls can defend the current trendline or if further downside is imminent.

Key Levels to Watch

• Support: $112,000 (ascending trendline)
• Resistance: $122,000 (recent rejection zone)
• A break below support could lead to a test of lower levels ($105K–$108K).

Long-Term Holders Take Profits—Is a Local Top Forming?

The SOPR Ratio, which compares long-term holder (LTH) profitability to short-term holders (STH), surged to 3.82, signaling strong profit-taking by LTHs. This metric often spikes near market tops when experienced investors offload coins to newer entrants.

A 1.53% increase in this ratio suggests continued distribution, which could slow upward momentum unless demand absorbs the selling pressure. While this doesn’t guarantee an immediate correction, it aligns with past cycles where LTH profit-taking preceded short-term pullbacks.

Historical Precedents

• In early 2021 and late 2023, similar SOPR spikes coincided with temporary price consolidations before further rallies.
• If demand remains strong (e.g., ETF inflows), BTC may avoid a deeper correction despite LTH selling.

Bitcoin’s Scarcity Model Weakens as S2F Ratio Plunges

Bitcoin’s Stock-to-Flow (S2F) ratio, a measure of scarcity based on circulating supply versus new issuance, has dropped by 77.78% to 707.45K—its lowest level in recent months. A declining S2F suggests weakening scarcity dynamics, which could impact long-term valuation models.

Implications for Bitcoin’s Valuation

• The S2F model has historically correlated with BTC’s price appreciation over multi-year cycles.
• Short-term deviations are common during volatile periods but don’t necessarily invalidate the model entirely.
• Investors should monitor whether this decline reflects temporary market conditions or a structural shift in supply dynamics.

Funding Rates Indicate Cautious Optimism Among Traders

Despite recent price declines, Bitcoin’s OI-weighted funding rate remains positive at +0.0151%, indicating that traders are still paying premiums to maintain long positions. This suggests lingering bullish sentiment in futures markets but also raises risks of cascading liquidations if prices drop further.

Balancing Optimism and Risk

• Excessively high funding rates have previously led to sharp corrections (e.g., Q1 2024).
• Current levels are moderate compared to past extremes, suggesting traders are not overleveraged yet.

Conclusion: Will Bitcoin Rebound After Miner Stress Subsides?

Bitcoin faces mixed signals: miner stress persists, long-term holders are taking profits, and scarcity metrics have weakened. However, technical structure remains bullish, funding rates show optimism, and oversold conditions hint at a potential rebound.

What Traders Should Watch Next:

1. Hash Ribbons recovery signal – A reversal could indicate reduced miner selling pressure.
2. Key support at $112K – Holding this level is crucial for maintaining bullish momentum.
3. LTH selling pressure vs. demand absorption – Will new buyers offset profit-taking?
4. Macroeconomic factors – Fed policy and institutional flows may influence BTC’s next move.

While caution is warranted due to distribution signals and weakening scarcity metrics, Bitcoin’s resilience suggests that a rebound remains possible if key supports hold and miner stress eases in the coming weeks.