on-chain data shows that Bitcoin Miners are facing profit pressure as reserves continue to decrease, while mining difficulty remains very high despite the weakening BTC price.
The combination of shrinking reserves, reduced coin flow from exchanges to Miners , and persistently high mining costs could increase the risk of sell-offs from Miners if prices don't recover in the coming weeks.
- The Bitcoin reserves held by Miners are gradually decreasing to 1.806 million BTC, reflecting the pressure of operating costs.
- The "Exchange to Miner" line has fallen to multi-month lows, indicating less accumulation by Miners and limited liquidation.
- Mining difficulty remains around its historical peak (~660Z) despite falling prices, compressing profit margins and increasing capitulation risk.
Bitcoin reserves held by Miners have fallen to 1.806 million BTC.
According to CryptoQuant, the amount of BTC held by Miners has gradually decreased to 1.806 million BTC , suggesting a more structural withdrawal trend rather than a panic sell-off.
The chart shows that the reserve fund continuously decreased in the second half of 2025, consistent with the context of weakening prices causing mining revenue to decrease relatively compared to costs. When profit margins are squeezed, Miners often have to use their accumulated coins to pay for electricity, machinery, hosting, and Capital costs.
The decrease in reserves has two sides. On the one hand, the amount of "sitting" supply held by Miners is decreasing, which could reduce the amount of supply being held captive. On the other hand, it signals internal pressure: inefficient operators may be approaching the point where they have to sell more, shut down, or restructure in order to survive.
Bitcoin flow from exchanges to Miners hits multi-month Dip .
The "Exchange to Miner" line has dropped to multi-month lows, implying that Miners are receiving fewer coins from exchanges than before and are tending to rely on existing reserves rather than accumulating more.
CryptoQuant's dataset, which tracks transactions from exchanges to Miners wallets, shows a sustained downtrend. Inflows have fallen from peaks above 2,000 BTC/day to repeated lows in the 400–700 BTC range.
In practical operation, low exchange current is often associated with the following states:
- The Miners are no longer accumulating more resources.
- It depends more on the amount of inventory available.
- Liquidation is limited when market conditions are tight.
When juxtaposed with a declining inventory trend, the picture leans toward a period of “belt-tightening”: inventories are being steadily withdrawn, while external replenishment weakens. This typically translates to thinner profit margins compared to the previous period in the same cycle.
Bitcoin mining difficulty remains high despite price drop.
Mining difficulty remains near its historical peak (~660Z) according to Glassnode, creating an unfavorable skew given that BTC price has fallen sharply from its previous high.
When the difficulty is high, the network requires more computing resources to find blocks, making it difficult to reduce operating costs (electricity, equipment wear and tear, infrastructure costs) quickly. Meanwhile, lower prices lead to reduced revenue in USD, especially for units with high electricity costs or older generation machines.
- High difficulty: high maintenance and mining costs.
- Low prices: reduced mining revenue.
- Profit margins are being compressed: increasing financial pressure.
Historically, periods of "high difficulty but low prices" have often preceded the risk of Miners capitulation: some weak units have had to shut down, sell reserves, relocate to lower-cost areas, or restructure debt to continue operating.
Potential impact on Bitcoin market outlook
If BTC remains below $90,000, liquidation pressure on Miners could increase, raising the risk of supply sell-offs in the short term.
Combining three sets of signals—decreasing reserves, weakening inflows from the exchange to Miners , and high Peg difficulty—suggests an imbalance between mining costs and revenue. In a scenario where prices do not recover, Miners may be forced to adjust to survive.
- Sell additional inventory.
- Reduce operating capacity.
- Move to an area with lower costs.
- Listing these holdings on the exchange increases supply pressure.
Current trends don't definitively confirm capitulation, but they suggest the mining industry is gradually moving in that direction. A strong price surge could quickly relieve pressure, but without a catalyst, Miners liquidation will be a key variable to watch in the coming weeks.
Conclude
The Bitcoin mining industry is facing "three-pronged pressure": declining reserves, weakening coin flow from exchanges to Miners , and persistently high difficulty levels. If BTC continues to trade below $90,000, the risk of supply shortages from Miners could return and impact the short-term direction of the market.
Frequently Asked Questions
Does a decrease in Miners reserves always signal a bearish outlook for Bitcoin?
Not necessarily. Decreasing inventories could reflect Miners selling to cover costs when profit margins are thin, but the impact on price also depends on the scale of the sale, the level of demand absorption, and the overall market liquidation landscape.
What does a decrease in "Exchange to Miner" indicate?
It suggests that Miners are receiving less BTC from exchanges, often associated with a lack of accumulation, requiring them to rely on existing reserves and potentially facing liquidation constraints when market conditions are unfavorable.
Why does a high difficulty level put pressure on Miners when prices fall?
High difficulty makes it hard to quickly reduce mining costs, while falling prices lead to decreased revenue in USD. This disparity compresses profit margins and can push less efficient units to decide to sell off reserves or shut down operations.
What is Miners capitulation?
This is the stage where some Miners, often the high-cost group, are forced to cease operations or sell their reserves to maintain operations, restructure financially, or leave the network.
