The Bitcoin network hashrate hit a new all-time high earlier this week following increased selling from smaller mining entities. At the same time, the miner hash price has plunged to a record low.

According to a report from CryptoQuant, Bitcoin’s hashrate currently stands at 627 exahashes per second (EH/s), representing a significant recovery from an 8.5% drawdown in July. The spike comes as BTC struggles to remain above $58,000 and trades at a level 20% below its all-time high of $73,000.

Miner Hashrate Increases

The surge in hashrate translates to more difficulty for miners because mining each block becomes harder and more competitive, requiring more computing power and increased energy costs. However, such an occurrence also means high security for the largest blockchain.

Bitcoin hash price, a metric that measures how much a miner can earn per amount of mining computing power, plummeted to a record low of $0.038 per TH/s. Shortly after the Bitcoin halving in April, this metric hovered around $0.05 per TH/s. This decline also coincides with a miner capitulation that occurred last week.

Miner outflows surged as BTC briefly slipped to $49,500. Outflows from this cohort of market participants spiked to 19,000 BTC on August 5, the highest level since March 18.

This indicated that miners sold a portion of their holdings as their average profit margins reduced to 25%, the lowest since January 22. During the sale of their reserves, some miners realized losses due to bitcoin’s dip in value. They saw the largest daily loss since May 29, a whopping $22 million.

Smaller Miners Are Selling

Large Bitcoin mining entities have increased their holdings through consistent accumulation despite the miner capitulation. The reserves of this cohort of market participants current amounts to 66,000 BTC.

Conversely, the Bitcoin holdings of smaller entities have bottomed. These miners may record more declines in their reserves as on-chain analysis shows more selling activity due to low profitability. CryptoQuant’s Miner Profit/Loss Sustainability metric indicates that miners are still underpaid, especially as mining difficulty is on the rise and prices have slumped.

On the brighter side, miner capitulation events and higher miner outflows usually occur near local bottoms for BTC prices during bull cycles. This means that a bitcoin rally may be on the horizon.