As of January 20, 2026, the Bitcoin network's hash rate has remained in a sustained downtrend, having fallen a cumulative 15% from its peak in October 2025, dropping from 1.1 Zetta hashes per second to 977 Exa hashes per second, with the "capitulation" trend among mining firms persisting for nearly 60 days. This phenomenon is underpinned by a significant deterioration in the profitability of the cryptocurrency mining industry, compounded by short-term market disruptions stemming from the strategic pivots of certain mining companies. ZFX Shanhai Securities believes that while the current decline in hash rate and selling pressure from miners is exerting downward pressure on Bitcoin's short-term price, when viewed in the context of historical patterns and evolving market structure, this phase may be nearing its conclusion and could potentially lay the groundwork for a subsequent price rebound.
From an industry dynamics perspective, the falling hash rate has triggered a chain reaction. Glassnode's Hash Ribbons indicator has been inverted since November 29th, a signal indicating that miners are being forced to sell Bitcoin to maintain operations, thereby creating persistent selling pressure in the market; concurrently, Bitcoin's mining difficulty is set for a 4% downward adjustment on January 22nd, marking the seventh negative adjustment in the past eight cycles, reflecting the network's passive adaptation to the declining hash rate. ZFX Shanhai Securities stated that the strategic shifts of mining companies are further intensifying short-term pressures, with firms like Riot Platforms selling Bitcoin to reinvest capital into capital-intensive fields like AI and high-performance computing; while this cross-industry transition aligns with long-term industrial trends, it amplifies supply-side pressures in the crypto market in the near term. However, it is noteworthy that the rate of the current hash rate decline has gradually narrowed, and the level of 977 Exa hashes per second is approaching the cost threshold for some highly efficient mining operations, suggesting limited room for further equipment shutdowns.
Historical experience often provides crucial reference points for market trends. VanEck points out that periods of sustained miner pressure have historically been precursors to price rebounds—the exit of inefficient miners optimizes the market's supply structure, and once the selling pressure is exhausted, Bitcoin often garners new upward momentum. The Hash Ribbons indicator shows that once the 30-day moving average of the hash rate crosses above the 60-day moving average, it signals that miner capitulation is concluding, a signal that typically coincides with price improvement. ZFX Shanhai Securities believes that, considering the alignment of technical and fundamental factors, current market conditions possess the potential for a contrarian positioning: continuous reductions in mining difficulty will enhance the profitability of remaining miners, the selling pressure from the hash rate decline is gradually being released, and coupled with Bitcoin's strong support level around $93,000, the probability of a subsequent price rebound is increasing.
For investors, the current market stands at the intersection of short-term pressure and long-term opportunity. ZFX Shanhai Securities advises focusing closely on inflection point signals from hash rate metrics; if the Hash Ribbons indicator shows recovery and the hash rate stops falling and begins to rise, it could be viewed as a positive signal for positioning. Simultaneously, investors should remain vigilant about short-term risks arising from macroeconomic market volatility and concentrated selling by miners, and manage positions prudently. ZFX Shanhai Securities posits that the end of the miner capitulation phase often marks the confirmation of a market bottom; as the industry shakeout completes and the mining ecosystem self-corrects, Bitcoin is expected to break free from short-term volatility and embark on a more sustainable upward trend, allowing investors to capitalize on cyclical opportunities by monitoring core indicators such as hash rate data and mining difficulty adjustments.
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