Bitcoin is trading at $68,247 at the time of writing, roughly $20,000 below what it costs to mine a single coin. Crude oil has surged 51% in a month to nearly $100 a barrel, pushing electricity costs – miners’ largest operational expense – higher at exactly the wrong time. The numbers are difficult, and they are getting worse.
Yet on-chain data tells a different story about what miners are actually doing with the coins they produce.
The Scale of the Squeeze
According to Jeremy, founder of Glyde, Bitcoin miners are currently losing approximately $19,400 on every coin they mine, based on an average production cost of $88,000 against a market price of $68,600 at the time of his analysis. Network difficulty has dropped 7.76%, the second largest negative adjustment of 2026.
The hashrate has retreated to 920 EH/s from a record 1 zetahash reached last year. Block times have stretched to 12 minutes and 36 seconds against a 10-minute target, a visible sign that mining machines are being switched off as operators exit unprofitable positions.
Oil Price Is Adding Fuel to the Fire
Crude oil is currently trading at $99.207, up 51.15% over the past month, with Brent crude at $113.647 – up 60.57% in the same period. For an industry where electricity represents the majority of operating costs, rising energy prices are compressing margins from the other direction simultaneously.
Miners are not just dealing with a falling Bitcoin price. Their costs are rising while their revenue falls.
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The Signal in the Data
Despite the pressure, Cryptoquant author and analyst Darkfost has flagged a development that runs counter to what the pain would suggest. Monthly average Bitcoin inflows from miners to Binance have dropped to approximately 4,316 BTC, the lowest level since June 5, 2023.
Across all exchanges, the figure reaches 4,381 BTC. Miners are not selling, even as they operate at a loss, and they still hold an estimated 1.8 million BTC in reserve. Darkfost described the current decline in inflows as a constructive signal, noting that structural selling pressure from the miner cohort appears to be temporarily easing.
What History Says About This Setup
Jeremy pointed to a pattern worth noting. In both 2019 and 2022, every time Bitcoin traded this far below its average production cost, it marked a cycle low.
His conclusion was direct: “The last two times this happened, the bottom was already in.”
History does not guarantee repetition. But the combination of collapsing miner selling and deeply underwater production economics has, in prior cycles, preceded recoveries rather than further declines.
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FAQs
When BTC falls below mining cost, miners operate at a loss, often reducing output or shutting down machines, which can signal market stress or a potential cycle bottom.
Recent data shows miners are holding rather than selling, with exchange inflows dropping, which reduces selling pressure and can support price stability.
Bitcoin may face short-term pressure, but reduced miner selling and past cycle patterns suggest the market could be nearing a potential recovery phase.
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