Miners' behaviour is cyclical and directly linked to the price of Bitcoin. Consequently, when BTC is at an all-time high, they increase supply in order to take profits and cover their operating costs. When the price corrects and mining difficulty drops, their profitability falls significantly. This then incentivises miners to accumulate coins and wait for better days ahead.

Bitcoin has already declined 40% from its November highs. This, in turn, has reduced the daily profitability of one of the best rigs on the market, the Antminer S19j Pro (which costs $11,000) from $25 to $15, similarly slashing the daily yield for one terahash from $0.45 to $0.22.

Major mining companies are increasing their production capacities by raising investment capital. They won't resort to powering down their rigs even if their profitability turns negative. For this reason, calculation difficulty is increasingly less correlated with price. That explains why it has increased three times despite the current 40% correction in Bitcoin's price. What's more, it will most likely rise a further 0.8% in the next 10 days.

In a bid to avoid operating at a loss, the majority of miners are switching to Bitcoin mining. According to data from Glassnode, they started to actively put aside coins once the price fell below $45,000. Miner reserves have now reached 1.9 million BTC or 10% of the total amount issued. If we exclude lost coins, this indicator is close to 15%.

On this occasion, miners' behaviour is in line with general sentiment: following the November sell-off, the market is mostly accumulating coins.

The reduced market supply will buoy Bitcoin. Another positive factor will be the normalisation of the situation in Kazakhstan, which is the second-largest player in the global mining market.

StormGain analytics group

(cryptocurrency trading, exchange and storage platform)