. This morning, @vaneck_us reported that miners capitulated.

It is emphasized that Bitcoin's hash rate has decreased by 4% in a month, and historical patterns show that,

In this case, there is a 77% probability of an increase within 180 days, with an average increase of 72%.

Miner capitulation is indeed a bottom signal, but the issue with retail investors is not that they can't understand the signal.

In the morning, Xiao Shuai dissected the data from VanEck and discovered three overlooked key details.

Detail 1, a 77% probability corresponds to the data 180 days later.
VanEck's research is rigorous, but there is a prerequisite that many people have overlooked:

After the hash rate decreases, the probability of an increase within 90 days: 65%
After the hash rate drops, the probability of an increase within 180 days: 77%

In other words, you have to wait for half a year.

But the problem for retail investors is.
Seeing the news of "Miner Capitulation," I went all in the next day;
The first week fell by 5%, starting to doubt;
The second week fell by 10%, starting to capitulate;
Dropped 15% in the third week, completely liquidated;

Detail 2, the computing power has decreased by 4%, is it "Capitulation", or "capacity transfer"?
The VanEck report mentioned a key piece of information:

This time the hash rate decline is mainly due to approximately 1.3 GW of mining capacity being shut down in China, with some capacity shifting towards AI demand.

Xiao Shuai reviewed the historical data and found that there are two types of miner capitulation:

True Capitulation,
Miners are forced to shut down due to losses, they can't hold on any longer and can only sell coins to recover.

After this capitulation, the hash rate will continue to decline for 2 to 3 months, triggering the "death spiral," and then we will reach the true bottom.

False Capitulation,
Miners shut down voluntarily for other reasons, such as shifting to AI, but hold their coins without selling, waiting for a higher price.

After this capitulation, the hash rate will stabilize after about a month, and the market will recover quickly.

What kind of 4% decrease in hash rate is this?

Xiaoshuai's judgment is more like a "false capitulation."

The reason is simple.
The breakeven electricity price for the S19 XP Miner has decreased from 0.12 USD per kWh to 0.077 USD per kWh.

This means that miners with electricity costs below $0.077 per kWh are still profitable.

The miners who shut down are more about "not wanting to mine" rather than "unable to mine."

If it is a "false capitulation", then retail investors are currently all-in, which is betting on a "bottom that may never come".

Detail 3, VanEck's data sample includes two super bull markets.

I carefully looked at the time frame of the VanEck research, from 2014 to the present.
During this period, Bitcoin has experienced:
In the bull market of 2017, it rose from 1,000 dollars to 20,000 dollars.
In the bull market of 2021, it rose from $10,000 to $69,000.

In other words, a significant portion of the data stating "an average increase of 72% after a 180-day decline in hash rate" is contributed by the bull market cycle.

But what is the situation now?
The expectation of the Federal Reserve's interest rate cuts has cooled, BTC has dropped from $126,000 to $88,000, a decline of 30%. Fear and Greed Index: 25, Extreme Fear.

The macro environment is completely different from that of 2017 and 2021. Can historical patterns be fully replicated in such an environment?

What should retail investors do?
Don't rush to go all in, first look at these 3 confirmation signals.

1. Has the hash rate been continuously declining for more than 2 months?
Real miners' capitulation will lead to a continuous decline in hash rate for 2 to 3 months, triggering a "death spiral."

If the hash rate stabilizes within a month, it indicates that it is just a "capacity transfer", not true Capitulation.

It has only been 1 month, and it cannot be confirmed yet.

2. Are miners starting to sell off on a large scale?

The core logic of miner capitulation is "I can't hold on any longer, I can only sell coins to recover."

Looking at on-chain data, whether the deposit amount from miner wallets to exchanges has significantly increased.

If there is no large-scale sell-off, it indicates that the miners are still "playing dead," waiting for higher prices.

3. Will the BTC price break through the key support level?
The true bottom is usually accompanied by a moment of "breaking through everyone's psychological defense line."
For example:
In 2018, it fell below $6000, and the market was in complete despair.
In 2022, it fell below 20,000 USD, once again in despair.
BTC is currently at $88,000, not yet at the level of "despair."

When it falls below 80,000 and 75,000, and the market sentiment completely collapses, that will be the true bottom.

Miner capitulation is a bottom signal, and this logic makes sense. But the issue for retail investors is, can you withstand 180 days of torment?

Most of the people who rush in when they see "Miner Capitulation" can't last for 1 month.
Those who can really hold on for 180 days don't need to pay attention to the "Miner Capitulation" signal.

Institutions see signals, will set stop losses, build positions in batches, and wait patiently.
Retail investors see the signal, go all in, and then cut losses in agony.

If you can withstand 180 days of torment, then now is indeed the time to lay out your plans.

But if you can't hold on, it would be better to wait until the three signals of stability in hash rate, miner capitulation, and price breaking below support level all appear before considering entering the market.