On-chain data shows that Bitcoin mining hashrate has recently increased, suggesting that miners are back to expanding their resources.
Bitcoin mining hashrate rebounds from recent lows
“Mining Hashrate” refers to a metric that tracks the computing power that Bitcoin miners currently have connected to the network. It is measured in units of terahashes per second (TH/s).
As the value of the metric increases, existing miners add to their facilities and recent miners join the network. Such a trend means that miners find the network attractive.
On the other hand, the drop in the indicator suggests that some miners have decided to disconnect from the blockchain, probably because mining is no longer profitable for them.
Here is a chart showing the trend of the 7-day moving average (MA) of Bitcoin mining hashrate over the past year:
The value of the metric appears to have been going up in recent days | Source: Blockchain.com
As shown in the chart above, the 7-day MA of Bitcoin Mining Hashrate fell to around 610 million TH/s at the beginning of the month from a record high of 667 million TH/s in overdue July. The reason for this trend is likely the bearish momentum that BTC experienced during this period.
Miners earn most of their income through block grants, which are awarded at a set rate of BTC and a set interval. So the only variable related to these rewards is the cryptocurrency’s USD price. The previous asset cut had a drastic effect on miners’ finances.
The price of BTC fell below $50,000 during this crisis, but has seen some noticeable improvement since then, although it is still a long way from the $70,000 level it reached at the end of last month.
Interestingly, despite the insufficient recovery, the 7-day MA Mining Hashrate has shown a pointed rebound over the past week, reaching 650 TH/s two days ago. It seems that some miners may be betting on a better outcome for the asset in the near future.
A popular indicator used to track BTC miners based on Hashrate is the “Hash Ribbons.” The Ribbons here refer to the 30-day and 60-day MA Hashrate.
When the former crosses the latter, miners are considered to be going through a capitulation phase as they quickly turn off their computing power. Historically, BTC has tended to bottom out when miners were in trouble.
On-chain analytics firm CryptoQuant discusses the latest trend in this metric in a recent article fasting on X
The data for the Hash Ribbons over the last few years | Source: CryptoQuant on X
The chart shows that Bitcoin Hash Ribbons had previously given a capitulation signal, but the 30-day MA has since re-crossed above the 60-day MA.
“While this indicator is not intended to accurately determine a price bottom, it often precedes higher prices, signaling a reduction in selling pressure from miners, CryptoQuant explains.
BTC price
At the time of writing, Bitcoin is trading at around $58,800, down 4% over the past week.
Looks like the price of the asset has been moving sideways over the last few days | Source: BTCUSD on TradingView
Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com
