How do miner capitulation events, reflected in on-chain data, hint at possible Bitcoin price reversals?
Why is this the correct answer?
This is correct because miner capitulation refers to when mining becomes unprofitable and miners sell coins to cover costs. On-chain metrics like SOPR drop as they sell at a loss. Once these forced sales subside it often marks a bottom, with fewer sellers left in the market. Beginners learn that these capitulation events can signal the end of downtrends and the start of new upward price movements.
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