On-chain data shows that bitcoin’s hashrate has recently dropped again as the cryptocurrency’s price has continued a downward trajectory.
bitcoin mining hash rate has recovered again after its August rally
“Mining hashrate” refers to a bitcoin metric that tracks the total amount of computing power miners currently have connected to the btc network.
When the value of this metric increases, it means that new miners are joining the blockchain and/or old ones are expanding their facilities. This trend implies that the network looks like an attractive venture for these chain validators.
On the other hand, the indicator registering a drop implies that some of the miners have decided to disconnect from the chain, potentially because btc mining is no longer profitable for them.
Now, here is a graph of Blockchain.com This shows how the 7-day average bitcoin mining hashrate has changed over the past year:
<img decoding="async" class="alignnone wp-image-319036 size-large aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/09/Bitcoin-Hashrate-Erases-Recovery-as-BTC-Remains-Bearish.png" alt="bitcoin mining hash rate” width=”980″ height=”412″ srcset=”https://bitcoinist.com/wp-content/uploads/2024/09/chart.png?w=1383 1383w, https://bitcoinist.com/wp-content/uploads/2024/09/chart.png?w=640 640w, https://bitcoinist.com/wp-content/uploads/2024/09/chart.png?w=768 768w, https://bitcoinist.com/wp-content/uploads/2024/09/chart.png?w=980 980w, https://bitcoinist.com/wp-content/uploads/2024/09/chart.png?w=750 750w, https://bitcoinist.com/wp-content/uploads/2024/09/chart.png?w=1140 1140w” sizes=”(max-width: 980px) 100vw, 980px” data-recalc-dims=”1″/>
Looks like the value of the metric has gone down in recent days | Source: Blockchain.com
As can be seen in the chart above, the 7-day average bitcoin mining hashrate had shown an increase in the middle of last month and had recovered to levels not far from its all-time high (ATH) set in July.
However, towards the end of the month, the indicator began to decline and has now retreated to almost the same lows as in the first third of August.
The explanation for these trends may lie in the fact that miners rely on the btc spot price for their profit margin. This is because the block subsidy, which they receive as compensation for solving blocks on the network, constitutes the main part of their income.
These rewards are given out at a fixed value in btc and at a fixed time interval, so the only variable related to them is the USD price of the cryptocurrency. With the price struggling against bearish winds again recently, it makes sense that miners have been reducing their operation sizes.
However, as has historically been the case, this recent drop in the 7-day average bitcoin mining hashrate may not sustain for long, and any further rise in price will likely renew the uptrend in the metric.
In addition to the hashrate, another indicator that could perhaps show miners' distress is the mining reserve, which measures the total amount of bitcoin currently held in the wallets related to these chain validators.
As analyst Ali Martinez has pointed out in an article in x x.com/ali_charts/status/1830513966365258163″ target=”_blank” rel=”noopener nofollow”>mailMiners engaged in a notable amount of selling over the weekend.
<img loading="lazy" decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/09/Bitcoin-Hashrate-Erases-Recovery-as-BTC-Remains-Bearish.jpeg" alt="bitcoin Miners Pool” width=”4000″ height=”2250″/>
The trend in the btc Miner Reserve over the past month | Source: x.com/ali_charts/status/1830513966365258163/photo/1" target="_blank" rel="noopener nofollow">@ali_charts on x
In total, bitcoin miners withdrew 2,655 btc from their wallets during this window, which is worth over $156 million at the cryptocurrency's current exchange rate.
btc Price
At the time of writing, bitcoin is hovering around $59,000, down more than 5% in the past seven days.
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The price of the coin appears to have been moving sideways over the past few weeks | Source: BTCUSD on TradingView
Featured image by Dall-E, CryptoQuant.com, Blockchain.com, chart by TradingView.com
