On-chain data shows that bitcoin's Hashrate has seen a setback recently, a possible indication that miners may not believe the asset's run will last.
bitcoin mining hashrate has declined from its all-time high
“Hashrate” refers to a metric that tracks the total computing power of miners currently connected to the bitcoin network. The value of this indicator is measured in terms of hashes per second (H/s) or the larger and more practical, terahashes per second (TH/s).
When the value of this metric increases, it means that new miners are joining the network and old miners are expanding their farms. This trend implies that blockchain is a lucrative opportunity for these chain validators.
On the other hand, the downward indicator suggests that some miners have decided to disconnect their platforms from the network, potentially because they can no longer cover expenses.
Now, here is a chart showing the trend in the 7-day average of the bitcoin Mining Hashrate over the past year:
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As shown in the chart above, bitcoin's 7-day average Hashrate had risen sharply earlier and set new records. However, the metric has fallen since peaking near 755 million TH/s earlier this month.
The previous bullish trend in the indicator was due to the positive price action that the asset had been enjoying, as the price is directly related to miners' income.
There are two ways these chain validators earn income: transaction fees and block subsidy. The first depends on traffic conditions and can change drastically from day to day. The latter, on the other hand, has very specific limitations.
The block subsidy remains fixed in the value of btc for approximately four years, at the end of which an event called Halving cuts it exactly in half. These rewards are also awarded at a more or less constant rate, meaning that miners' daily block subsidy income in terms of btc always remains fairly predictable.
However, one variable can be freely changed and that is the USD value of these rewards. Whenever the price increases, miners' block subsidy income also increases. That is why the Hashrate tends to grow in bullish periods.
bitcoin has been exploring new highs recently, but interestingly, the Hashrate has remained silent. The indicator is around 723 million, which means it has decreased more than 4% from the peak. This trend could indicate that miners expect the current rally to hit a roadblock.
btc Price
At the time of writing, bitcoin is trading around $91,900, up more than 8% in the last seven days.
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