Bitcoin miners faced increasing pressure in late January and early February after network difficulty declined by roughly 14 percent over three weeks, while publicly listed miner Cango revealed it sold $305 million worth of Bitcoin.
The combination of weakening profitability indicators and targeted asset sales suggests mounting stress across the mining industry, even though broader on chain data does not yet point to widespread or panic driven selling.
Falling Difficulty Signals Mining Cutbacks
On chain analyst Axel Adler Jr. reported on February 10 that Bitcoin’s network difficulty dropped a total of 14.1 percent between January 22 and February 6, following two consecutive reductions. Such declines typically indicate that less efficient miners are shutting down equipment, often during periods of declining prices.
Over the same period, Bitcoin’s price fell by about 25 percent, briefly dipping to $60,000 before recovering toward $70,000. At the time of reporting, Bitcoin was trading near $69,000, down slightly on the day and more than 12 percent over the past week, according to CoinGecko.
Bitcoin has also dropped around 24 percent over the past month and nearly 29 percent compared to a year ago, falling short of earlier cycle expectations and keeping mining profit margins under pressure.
Amid these conditions, Cango confirmed the sale of 4,451 BTC for approximately $305 million, saying the move was intended to strengthen its balance sheet. The announcement weighed on investor sentiment, with Cango shares closing 8 percent lower in the first trading session following the disclosure.
Adler emphasized that the sale appeared to be an isolated event rather than a sign of forced liquidation across the sector. He noted that overall miner transfers to exchanges remain stable, suggesting no large scale dumping of reserves.
Data tracking miner inflows to exchanges supports this view. The 30 day average of daily miner transfers stands near 82 BTC, only slightly below mid January levels and consistent with recent norms. There have been no sustained spikes that would indicate broad selling pressure from miners.
Profitability Remains Under Strain
Profitability indicators continue to signal stress. Adler noted that the Puell Multiple, which compares daily miner revenue to its annual average, fell to a 30 day average of 0.77 in early February, down from 0.86 in mid January. Short term readings briefly dropped to around 0.61, a range historically linked to mining stress and capacity reductions.
When miners earn below their annual average, they tend to focus on liquidity and selective reserve sales rather than expansion. Adler added that a full recovery typically requires difficulty adjustments to turn positive and the Puell Multiple to move back toward the 0.85 to 0.90 range.
For now, the data suggests miners are responding mainly by reducing hashrate rather than selling aggressively. However, Adler warned that another drop below $60,000 could further pressure profitability and trigger additional sales by other publicly traded miners.
