Bitcoin rebounded to $91,950 on Wednesday, with data indicating that the market is at a critical turning point. Data from Capriole Investments shows that the production cost of Bitcoin is approximately $83,873, while the electricity cost (the baseline energy input for mining) is even lower at $67,099.
Key Points:
Bitcoin is currently trading just above the production cost for miners, with profit margins being squeezed.
High hash rates and collapsing hash prices are pushing miners toward a pressure threshold.
The dynamic NVT ratio has fallen below its low range, historically bullish, but often experiences a final tail end.
Currently, the price for Bitcoin miners is $87,979, leaving a profit margin of only 4.9%, one of the lowest readings in this cycle. Historically, thin profits tend to act as a stabilizing force rather than a pressure signal. As profit margins narrow, inefficient miners are often eliminated, leading to adjustments in difficulty, which significantly eases the supply pressure from miners.
This often constitutes the kind of "silent support" that forms during Bitcoin's transition from panic-driven sell-offs to more prolonged accumulation phases.
Recent data shows that miner profits are being squeezed by a surge in network competition. In October, Bitcoin's hash rate reached a record high of 1.16 ZH/s, even as Bitcoin's price slid to $81,000 entering November.
However, the revenue miners earn per unit of hash power—hash price—fell below $35 per hash on November 25, now well below the median of $45 per PH/s for listed mining companies. The payback period for mining machines has extended to over 1,200 days, while rising financing costs and increased borrowing by miners further exacerbate the pressure.
Cointelegraph previously reported that although many mining companies are accelerating their transition to artificial intelligence and high-power computing, the revenue generated from these services is still insufficient to offset the sharp decline in Bitcoin mining income.
This is precisely why the current compression of miner profits is significant. When miner pressure rises and spot prices approach production costs, the market often enters a reset phase: weak miners exit, difficulty decreases, and overall selling pressure eases.
In addition to miner data, Bitcoin's dynamic network value to transaction ratio (NVT) has fallen below its low value of 194, sliding into what can be termed the network "value zone." A lower NVT indicates that Bitcoin's market capitalization is lagging behind on-chain transaction intensity, a state that typically occurs later in a pullback rather than early on.
Historically, this is a constructive development. Whenever the dynamic NVT enters this low range, it indicates that the market has underestimated underlying network activity, often setting the stage for a broader reversal after sentiment turns bullish.
However, this signal also comes with a caveat: it has historically rarely marked an absolute bottom. In past cycles, Bitcoin often establishes an initial low and rebounds after the ratio falls below the NVT low, only to revisit that range before turning upward again.
If this pattern repeats, Bitcoin may dip below $80,000 once more. Even so, the compression of miner profits combined with the dynamic NVT falling into the value zone seems more like pushing Bitcoin into a bottom-building structure rather than being in the middle of a prolonged decline.
Related: Australia advances legislation to bring cryptocurrency under financial legal regulation
Original: “Bearish Bitcoin Mining Data May Become a Counter-Signal, Boosting Spot-Driven BTC Rebound”
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