Bitcoin mining is showing clear signs of a slow-motion capitulation, with daily miner revenue collapsing to approximately $30 million in mid-March, down from over $60 million at the bull market peak. This severe compression in revenue is forcing operational decisions, including potential sales of BTC reserves, which adds direct sell pressure to the market.
Analyst Joao Wedson highlighted the situation, noting that the mining sector had not capitulated back in January, shortly before Bitcoin's price dropped from around $96,000 to near $60,000. While hash rate recovered briefly, it is now weakening again. "The mining sector is losing momentum," Wedson stated, pointing to a familiar cycle where compressed margins force the weakest operations offline first.
On-chain data confirms the trend. Total network hash rate peaked near 120,000 TH/s around October 2025 before beginning a choppy decline. Network difficulty, sitting at approximately 145 trillion as of March 16, tells a similar story of declining computational power. Concurrently, Bitcoin's price hovered just under $70,000.
Wedson outlines two difficult paths forward for miners: hardware innovation, which is financially impractical for most after heavy capital investments in 2023-2024, or consolidation through attrition, where smaller miners get squeezed out. The hashrate distribution adds another concern, with roughly 57% of blocks mined by "Unknown" pools over a six-month window, raising questions about network transparency and centralization.
The broader market is already feeling the impact. On March 20-21, the crypto market absorbed over $541 million in liquidations within 24 hours, with $443 million coming from long positions. Bitcoin led with $191 million in liquidations. This volatility was partly pinned to a massive $1.72 billion Bitcoin options expiry on Deribit, which settled at the $70,000 "max pain" strike, freezing price action. Futures open interest fell 5.6% to near $107 billion, and funding rates for major assets turned negative, indicating renewed demand for short positions.
Despite the stress, a crash is not deemed imminent, as miners are historically resilient. However, the mining sector is a leading indicator, and the current signals of revenue collapse and hash rate weakening suggest underlying market stress that extends beyond short-term price action.
