On-chain data shows that bitcoin’s mining hash rate has approached its all-time high (ATH) as btc has rallied beyond the $67,000 mark.
The average bitcoin mining hashrate for 7 days has seen a surge recently
“Mining hash rate” refers to a metric that tracks the total computational power that miners currently have connected to the bitcoin blockchain.
When the value of this indicator registers an increase, it means that new miners are joining the network and old ones are expanding their capabilities. This trend implies that the network looks attractive for these chain validators.
On the other hand, the fact that the metric is experiencing a drop implies that some miners have decided to disconnect from the chain, possibly because they find it unprofitable to mine btc.
Now, here is a chart showing the trend in the 7-day average bitcoin mining hashrate over the past year:
<img decoding="async" class="alignnone wp-image-312230 size-large aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/07/Bitcoin-Hashrate-Nears-All-Time-High-as-BTC-Price-Rebounds-to.png" alt="bitcoin mining hash rate” width=”980″ height=”415″ srcset=”https://bitcoinist.com/wp-content/uploads/2024/07/chart.png?w=1385 1385w, https://bitcoinist.com/wp-content/uploads/2024/07/chart.png?w=640 640w, https://bitcoinist.com/wp-content/uploads/2024/07/chart.png?w=768 768w, https://bitcoinist.com/wp-content/uploads/2024/07/chart.png?w=980 980w, https://bitcoinist.com/wp-content/uploads/2024/07/chart.png?w=750 750w, https://bitcoinist.com/wp-content/uploads/2024/07/chart.png?w=1140 1140w” sizes=”(max-width: 980px) 100vw, 980px” data-recalc-dims=”1″/>
The 7-day value of the metric appears to have been rising in recent days | Source: Blockchain.com
As can be seen in the chart above, the 7-day average bitcoin mining hashrate had seen a steep drop after hitting a new all-time high in May. The reason behind this drop was likely the bearish action that the cryptocurrency had been undergoing previously.
Miners earn their income primarily from the block subsidy, which they receive as compensation for solving blocks on the network. The block subsidy is awarded more or less at a fixed interval, as well as in a fixed value of btc, so the asset's price in USD is the only variable related to them.
Therefore, when the price of assets goes down, so does the miners' income. This group has been under particularly high pressure since April for another reason: the fourth Halving.
Halvings are periodic events that occur roughly every four years that permanently halve the block subsidy. The halving that occurred this April was the fourth such event the cryptocurrency has seen in its history.
As these events drastically reduce miners’ primary revenue stream, they naturally have a negative effect on their finances. They are nothing that miners have not been able to shake off in the past, although, as is often the case, the combined effect of more efficient technologies and increases in the btc price brings miners back into profit.
In fact, the same has happened this time around, as the 7-day mining hashrate has almost completely recovered from its low at the beginning of the month. The price surge that bitcoin has enjoyed to the $67,000 level is naturally the driving factor behind this growth.
btc Price
At the time of writing, bitcoin is trading at around $67,500, up 3% from last week.
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Looks like the price of the coin has shown a bounce during the last day | Source: BTCUSD on TradingView
Featured image by Dall-E, Blockchain.com, chart by TradingView.com
