Observing the bottom formation through Bitcoin miner shutdowns: How history repeats itself again and again

Multiple scenes in Bitcoin history have witnessed forced shutdowns of mining machines—each time, behind these closures lies a thorough liquidation of previous bubbles and high-cost systems. On-chain data shows that currently, BTC is priced at $68.95K, but this level presents an interesting contrast to periods of large-scale miner shutdowns in the past. What does miner shutdown really mean? Why is it considered a precursor to a bull market?

Four Historical Warnings of Price Breakdowns Leading to Shutdowns

Bitcoin has experienced four significant phases where the price effectively fell below the mining shutdown threshold. In each case, miners were forced to shut down, sell off assets, or even exit the market. Although this process appears brutal, it is fundamentally a systemic liquidation of the previous bubble and high-cost ecosystem. During these phases, miners act as “stop-loss” agents; their exits and asset sell-offs may temporarily accelerate the decline, but from a cyclical perspective, this painful clearing process actually lays the groundwork for the next bull run.

2022: Collective Liquidation of Financial Miners

The collapse of FTX was a landmark event. As this crypto giant fell, Bitcoin once again dropped below the shutdown price, causing many mining companies to go bankrupt and leading to a historic purge of hash rate. This time, not only on-chain miners faced disaster, but also financial miners—such as lending-based mining operations and derivative hedging institutions—experienced collective liquidations.

This event pushed the market onto a new cost curve. Although prices did not immediately reverse upward afterward, historical data shows that BTC has not returned to the 15,000–18,000 price range for the long term. What does this imply? It indicates that the old cost structure has been permanently eliminated, inefficient participants have exited, and the market has reconstructed its support levels.

The Bottom Is Evident, and a New Cycle Is Taking Shape

In the years that followed, the market did not encounter extreme risk events capable of destroying the bull trend. Prices gradually moved into expansion phases, and cyclical patterns began to emerge. History repeatedly confirms a key principle: Bull markets often complete their bottoming process during deleveraging and bubble deflation.

After falling below the shutdown price, BTC may still experience 10%–30% fluctuations and volatility. However, from a deep cyclical perspective, the bottom zone has already appeared. This stage marks the end of the previous bull cycle and also signals the start of the next one. From shutdown to restart, from liquidation to rebuilding, the cycle advances through these repeated phases.