Recently, I’ve been pondering a question: why do some people still obsess over whether Bitcoin will drop to 40k? Actually, if you understand the economics of blockchain miners, the answer has long been written on the chain.

I spent some time studying an in-depth report, and the logic inside is quite interesting. Simply put, Bitcoin’s bottom isn’t a single point, but a range, and this range has already been guarded by three layers of defense—macro liquidity, miner costs, and on-chain chip distribution.

First, let’s talk about miners. In February last year, the Bitcoin network experienced a historic difficulty adjustment, dropping by 11.16%, the largest single negative adjustment since China’s mining ban in 2021. Hashrate fell from about 1.1ZH/s to around 863EH/s, a 20% drop. It looks scary, but in fact, this is market self-cleaning. High-cost miners were forced to shut down, leaving only those with real cost control ability.

So, what price level is the miners’ life-and-death line? I looked at data from mainstream mining machines. The shutdown price for the S19 series is around $75k–$85k, and these machines have been losing money for a long time. The S21 series is now the main model, with a shutdown price roughly at $69k–$74k. The latest S23 series can hold out down to $44k. This means that the $52k–$58k range is actually the miners’ last line of defense—if it falls below, even mainstream miners will shut down, and the network’s security will face a major restructuring.

But the miners’ line of defense is only one aspect. Even more interesting is what’s happening on-chain. Short-term holders (those who hold less than 155 days) now have an average cost basis over $92k, and with the current market price rebounding to over $81k, they are still at a loss. What does this indicate? It shows that the chips bought at high prices haven’t been fully cleared out yet. The true bottom should be when the cost lines of short-term holders (STH) and long-term holders (LTH) experience a “death cross”—meaning new entrants have a lower cost basis than the veterans, and the market is extremely undervalued.

What about long-term holders? They are actually operating in the opposite direction. Data shows that the average cost basis for LTHs is just over $40k, and they are starting to re-accumulate chips at low levels. Especially on the ETF side, when Bitcoin was around $60k, there was a net inflow of $166 million. BlackRock’s IBIT was accumulating counter-cyclically during the crash, and this “buy more as it falls” behavior by institutions indicates they see the $60k–$70k range as a value allocation zone.

From a technical perspective, it’s also quite clear. The 200-week moving average is now around $58k, which is historically the most reliable bottom indicator. VPVR (Volume Profile Visible Range) shows that the $72k–$52k zone has been a major turnover area over the past two years, especially the $52k–$58k segment, where chips are most densely accumulated. Coupled with the 2021 bull market’s chip structure, this creates what’s called a “triple resonance”—the miner shutdown price, the 200-week moving average, and the network’s realized price all overlapping in this range.

What about the macro environment? That’s the most complex variable. Last year’s Federal Reserve policy shifts (the so-called “Powell Shock”) indeed suppressed market sentiment. Prolonged high interest rates and the continued balance sheet reduction outlook cast a shadow over the market, hitting highly liquidity-sensitive assets like Bitcoin hard. But now (May), the situation seems to be improving; Bitcoin has already rebounded above $81k, indicating the market is digesting these macro factors.

I find the stablecoin angle particularly interesting. Despite Bitcoin’s sharp decline, the market cap of stablecoins remains high, holding above $40k. This suggests capital hasn’t truly fled the blockchain ecosystem but has shifted from highly volatile assets to safe-haven assets, waiting on-chain for opportunities. Once macro conditions clear, this $300+ billion in buying power will turn into fuel driving prices higher.

So, my understanding is that the $52k–$58k range is the “value bottom” of this cycle—over 60% probability. It’s not only the miners’ last line of defense, supported by the 200-week moving average, the realized price, and on-chain chip distribution, but also the accumulation by long-term holders and institutions. Unless a systemic financial collapse occurs, it’s unlikely to break below this zone.

For those looking to deploy, I suggest a phased approach. Build a core position at $60k–$65k (20–30%), as this range already offers a high risk-reward ratio. The $52k–$58k zone is the main accumulation area (40–50%), the most cost-effective entry point. Keep some liquidity reserved at $44k–$52k (20–30%) for defensive purposes against black swan events.

Right-side signals are also crucial. Watch whether the cost basis of STH and LTH experience a death cross, whether a volume spike with long lower shadows appears, monitor stablecoin market cap changes—especially USDC—and pay attention to whether the Fed signals liquidity easing. Once these signals confirm, they mark the true turning point for the blockchain market.

Looking back now, from the despair in February to the rebound in May, the market has been validating this logic. Those who understand blockchain economics, miner costs, and on-chain chip distribution have already started deploying. The cycle may be delayed, but it has never been absent.