Bitcoin miners struggle, seek derivatives for risk management amid Bitcoin revenue decline

Bitcoin is struggling to break the resistance around $85,000, a 30% decline from its all-time high of $109,287 in January.

As a result, there is rising market uncertainty about its current cycle phase.

According to an Anthony Power report published by Compass Mining, historical patterns tied to Bitcoin halving events suggest a potential upside in late 2025 or early 2026 despite the recent correction.

Bitcoin drawdowns (Source: Anthony Power)

Bitcoin’s prior cycles have consistently seen sharp rises followed by significant downturns, notably an 80% crash following its 2017 peak and a 75% decline post-2021 high.

On-chain indicators currently offer mixed signals. The MVRV Z-Score, a market-to-realized-value ratio, implies Bitcoin may now be in a deep value or consolidation zone, while the percentage of Bitcoin unmoved for over one year remains at 63%, indicative of investor caution and potential market stabilization.

The Fear & Greed Index further highlights market uncertainty, recently plunging to “Extreme Fear” at 15 after reaching “Extreme Greed” levels near 90 in December 2024.

Macro factors, including institutional investment shifts and US policy developments, are exerting significant influence. The approval of Bitcoin ETFs in January 2024 initially boosted prices by 126%, but early 2025 witnessed record ETF outflows, suggesting weakened institutional support.

Conversely, President Trump’s recent executive order establishing a US Strategic Bitcoin Reserve reflects ongoing federal adoption.

Despite short-term volatility, Anthony Power’s forecasts maintain optimism for Bitcoin’s long-term outlook. Standard Chartered and Bitwise project prices near $200,000 by year-end, driven by renewed institutional inflows and regulatory clarity.

For Bitcoin miners, the recent price correction combined with increased mining difficulty and reduced block rewards has substantially lowered profitability, emphasizing the need for strategic risk management through derivative tools like Luxor’s Hashprice contracts.