Bitcoin (BTC-USD) is on track to close out one of its worst months so far this year as heightened regulatory scrutiny outweighed positive news. The question is simple: will the slump continue or is the bottom in?

The original and most expensive crypto (BTC-USD) retreated 10.5% in August through the 25th, reversing its rally after a court decision in mid-July ruled that Ripple Labs’ XRP (XRP-USD) token is not a security. At the onset of the selloff, crypto traders suffered over $1B in liquidations as concerns mounted over the Securities and Exchange Commission delaying its decision on spot bitcoin ETF approvals, among other regulatory hurdles, as well as the notion that interest rates will stay higher for longer.

In nominal terms, BTC fell to $25.6K – the lowest level in two months – on Aug. 22 from $29.1K on Aug. 16, a day before the crypto swoon took hold. It then briefly bounced off the summer lows on Aug. 23 as a slew of riskier assets caught a bid, reaching as high as $26.5K, only to reverse all those gains. BTC changed hands at $25.8K as of Friday mid-afternoon trading.

The August correction also can be partly attributed to selling pressure across the stock market, with the S&P 500’s 4.4% slide and the tech-heavy Nasdaq’s 5.7% drop, as seen in the Bitcoin USD (BTC-USD) Charting below. J.P. Morgan analyst Nikolaos Panigirtzoglou noted that a report on Elon Musk’s SpaceX writing off its bitcoin (BTC-USD) holdings in the prior quarter “acted as an additional catalyst for the correction in crypto markets.”

Panigirtzoglou sees “limited downside for crypto markets over the near term,” according to a Thursday note to clients. He pointed out that open interest, or the number of outstanding derivative contracts that have yet to be settled, in CME Group’s (CME) bitcoin (BTC-USD) futures contracts shows the recent liquidations in long positions seems to be “at its end phase rather than its beginning.”

SA contributors Noor Darwish and Jason Appel laid out their bull recommendations for bitcoin (BTC-USD) before the crypto selloff.

Bitcoin miners are suffering this month, too

Of course, with this month’s weakness in bitcoin (BTC-USD), companies in the business of mining the token struggled as well. In fact, the world’s five largest publicly traded bitcoin miners [that is, Riot Blockchain (NASDAQ:RIOT), Marathon Digital (NASDAQ:MARA), Canaan (NASDAQ:CAN), Hut 8 Mining (NASDAQ:HUT) and Cipher Mining (NASDAQ:CIFR)] have collectively lost $2.8B in market cap from a month ago, according to a report from AltIndex published on Aug. 22.

On a M/M basis, Riot (RIOT) stock fell the most among the group, dropping 42.9%, followed by MARA (-35.5%), HUT (-35.4%), CAN (-31.9%), and CIFR (-22.2%).

In addition to their stock valuations, BTC miners’ top line is also taking a hit this month. Monthly revenue from crypto mining globally dropped to $455.1M at Aug. 23 from $865.2M at July 23, the report showed, citing TheBlock data.

Bitcoin (BTC-USD) miners’ profitability has been squeezed in recent years as token prices have more than halved from the November 2021 peak, inflation has pushed up miners’ costs, and the global hashrate keeps rising. Because of this, miners have been on the hunt for new revenue streams such as offering high performance computing (“HPC”) services to the fast-growing artificial intelligence market, Panigirtzoglou explained in a separate note.

SA analyst Mandela Amoussou talked up Canada-based Hut 8’s (HUT) efforts to diversify its business by gaining clients for its HPC services. “I think HUT stands to gain from this diversification,” he said. “HUT could capitalize on the growing demand for data center solutions, especially in the fields of AI, data analytics, and rendering, as the popularity of artificial intelligence and rendering continues to rise.”