On-chain data shows that Bitcoin mining hash rate has fallen to its lowest level since early March.
Bitcoin mining’s 7-day average hash rate has continued to decline recently
THE “mining hash rate” refers to an indicator that tracks the total computing power that miners currently have connected to the Bitcoin blockchain. The value of this metric could be considered an indicator of sentiment among miners.
When the value of the indicator increases, existing miners expand their mining farms and new ones enter the space. Such a trend suggests that the blockchain seems attractive to these chain validators.
On the other hand, the metric seeing a decline implies that some miners have decided to take their machines offline, potentially because they no longer find the cryptocurrency profitable.
Now here is a chart that shows the 7-day average Bitcoin mining hash rate over the past year:
The 7-day average value of the metric seems to have been going down in recent days | Source: Blockchain.com
As seen in the chart above, the 7-day average hash rate of Bitcoin mining hit a new all-time high (ATH) last month, but the metric has since seen a decline. This decline will likely be the bearish momentum seen by the cryptocurrency’s price.
Miners generate most of their revenue from BTC blocks rewards they receive as compensation for solving blocks. These rewards are fixed in value and more or less fixed in frequency. As such, the only variable tied to them is the spot price of BTC.
When the price of the asset falls, the value of the rewards received by these miners also falls, which naturally leads to a drop in revenue. Bitcoin has taken a big hit recently, so it makes sense that some miners have gone bankrupt.
Following the recent drop in mining hash rate, its value has plunged to its lowest level since early March. If BTC persists at its current lows or continues to decline, the indicator will likely extend its fall.
Due to miners’ distress, they have also recently sold their stored rewards, as one analyst pointed out in a CryptoQuant Quicktake. job.
The data for the BTC balance sitting in the wallets connected to the OTC desks | Source: CryptoQuant
The chart above shows the Bitcoin balance trend for the over-the-counter (OTC) offices. It appears that this metric has seen a notable increase recently. According to the quant, the selling movements of BTC miners were a factor behind this growth.
BTC Price
Bitcoin is trading near the lower end of its recent consolidation range, with its price at around $61,700.
Looks like the price of the asset has been stuck in a downtrend recently | Source: BTCUSD on TradingView
Featured image by Dall-E, CryptoQuant.com, chart by TradingView.com
