On-chain data shows that Bitcoin mining hashrate just hit a modern all-time high (ATH), despite the asset’s downward trajectory.

Bitcoin mining’s seven-day average hash rate has recently skyrocketed

“Mining Hashrate” refers to a metric that tracks the total amount of computing power that miners as a whole have connected to the Bitcoin blockchain. miners need this computing power because the BTC network uses a Proof-of-Work (PoW) consensus mechanism, where validators compete with each other to solve mathematical problems to add another block to the chain.

As such, the Hashrate may reflect how miners view the cryptocurrency. An boost in the rate may suggest that these validators currently find the asset attractive, so modern miners are coming in and/or senior miners are expanding their holdings.

Likewise, the drop means that some miners have decided to disconnect from the network, potentially because they no longer believe that mining BTC is profitable.

Here is a chart showing the trend in the 7-day average hashrate of Bitcoin mining over the past year:

Looks like the 7-day average value of the metric has been rising over the past day | Source: Blockchain.com

As shown in the chart above, the 7-day average Bitcoin mining hashrate spiked in slow July, setting a modern record for this metric. However, after this peak, the rate dropped off sharply, and it wasn’t until the second half of August that the metric saw some improvement.

This rebound continued for a while, but the indicator ended the month by reversing back to previous lows. As for why these trends played out the way they did, the answer may lie in the corresponding BTC price action.

Bitcoin miners earn the majority of their income from the block subsidy they receive after solving blocks on the network. The feature of the chain is that these rewards remain fixed in BTC value and are also more or less awarded at a set time interval.

This means that there is only one variable related to them: the cryptocurrency’s value in USD. So, whenever the price goes up, so does the revenue of miners. The July peak of Hashrate came when BTC surged to $70,000, while the drop that followed that peak came when the asset itself saw a pointed decline.

Interestingly, since early September, the seven-day average hash rate of Bitcoin mining has been rising even as the price has been steadily dwindling.

This suggests that miners have decided to be bold and have expanded their resources in anticipation of a future rally. The hashrate also showed a similar trend earlier this year, which led to a rally towards the ATH price for BTC.

Now the question remains whether this boost in Hashrate to a modern ATH will prove to be beneficial for Bitcoin miners this time as well or not.

BTC price

At the time of writing, Bitcoin is trading at around $55,100, down almost 6% in the past seven days.

The price of the coin appears to have been heading down over the last few days | Source: BTCUSD on TradingView

Featured image from Dall-E, Blockchain.com, chart from TradingView.com