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Why The Bitcoin Mining Hashrate May Not Be Out Of The Woods Just Yet

The bitcoin mining hashrate took a sharp nosedive as a historical storm tore through multiple US states. This saw power grids consolidate power to be able to provide enough energy for residents to heat their homes and some mining operations had to wind down to free up more of the electrical. There has been an increase in the hashrate since then but the worst may not be over yet.

Bitcoin Hashrate Takes A Beating

Electricity grids across the United States came under immense pressure as the country recorded one of its coldest winters yet. Temperatures dropped drastically across various states and the electricity grid was stretched thin to provide enough energy to heat homes. As a result, a number of bitcoin miners decided to pause their operations to free up some energy and this affected the hashrate contributed by the country.

By Christmas Day, the global hashrate had tanked almost 40%, dropping from its Dec. 24 peak of 276 exahashes per second (EH/s) to 175 EH/s. However, there was a 39% increase in hashrate on the same day which brought it back up to around 244 EH/s.

Bitcoin mining hashrate

Since then, the hashrate has continued to wobble day to day and has now dropped back to the 212 EH/s level once more. This shows that while miners may have turned some of their machines back on, they may be shutting them down once more as the extremely cold weather persists.

How Long Will This Last?

Winter storm expert for Atmospheric Environmental Research Judah Cohen said that the Arctic blast currently being experienced in the United States should be short-lived and last about a week before temperatures begin to return to normal. 

Bitcoin price chart from TradingView.com

However, this still leaves a couple of days before it is expected to completely subside. This is evidenced by the zig-zag recovery and dips in the bitcoin hashrate in the last two days following Dec. 25. Miners who have taken their operations offline to help stabilize the electricity grid will likely leave them offline for a while longer until authorities are convinced the weather has stabilized. An example of this was back in July when Riot Blockchain had to shut off its mining machines in Texas as the state faced a heat wave.

Related Reading: Bearish Indicator: Bitcoin Volatility Hits All-Time Low

Given this, the bitcoin mining hashrate is expected to trend low for another couple of days before bouncing back up. As for the miners, given that Riot had received $9.5 million in energy credits for turning off operations in July, it is possible that some sort of recompense will be offered to the miners.

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Analyst Explains Why Ethereum Is Bullish Against Bitcoin

An analyst has explained that the absence of miners on the Ethereum network could be bullish for the ETHBTC ratio.

Miners Provide A Persistent Selling Pressure On Bitcoin

As explained in a tweet by Tom Dunleavy, a Messari research analyst, BTC miners sell almost all the coins they mine. The below chart contains data about the top ten public Bitcoin mining companies, displaying information such as how much each of them mined this year, the amounts that they sold, and the size of their current holdings:

Bitcoin Public Miners

In total, the ten largest mining companies in the space mined a collective 40.7 BTC this year and sold 40.3 BTC. This means that they roughly dumped the entire supply that they mined in 2022 and in the process, applied constant selling pressure on the network.

Earlier in the year, Ethereum successfully transitioned to a Proof-of-Stake (PoS) consensus mechanism, which means the blockchain no longer uses miners for handling transactions, and rather uses stakers (investors that have locked 32 ETH in the PoS contract) to act as validating nodes.

In a Proof-of-Work (PoW) system, miners compete with each other using large amounts of computing power. Therefore, many expenses are involved in getting up their facilities, but one cost, in particular, stays with them as long as they continue to operate: the electricity bills. It is because of these electricity bills that miners have to continuously sell what they mine to keep their business sustainable.

Some miners try to hold onto their reserves for as long as possible, like Marathon, and Hut8 can be seen doing in the chart. Still, in a market like right now, where electricity prices have shot up while the BTC price has plummeted due to the bear, margins are fine for the already debt-ridden public miners, and thus most of them can’t afford to accumulate.

In the case of a PoS chain, however, stakers don’t incur such expenses and thus don’t have any particular need to sell the rewards they earn while staking. This implies that the type of selling pressure that miners put on Bitcoin isn’t present on the Ethereum blockchain.

The analyst believes that this fact provides a good thesis to be bullish on the ETHBTC ratio.

Ethereum Price

At the time of writing, ETH is trading around $1,200, down 1% in the last week.

Ethereum Price Chart

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Bitcoin Miner Selling Power Plunges, Green Signal For Price?

On-chain data shows the Bitcoin miner selling power has plunged recently, a sign that could be positive for the crypto’s price.

Bitcoin Miner Selling Power Has Plummeted In Recent Days

As pointed out by an analyst in a CryptoQuant post, there has been less selling pressure from the miners recently. There are two relevant indicators here, the miner supply and the miner outflow. The first of these, the miner supply, is simply a measure of the total amount of Bitcoin currently sitting in the wallets of miners.

The other one, the miner outflow, is a metric that keeps track of the total number of coins that miners are transferring out of their supply at the moment. Now, the “miner selling power” is defined as this miner outflow divided by the miner supply (30-day moving average, log-scaled).

When the value of this indicator is high, it means miners are transferring out large amounts compared to their total supply right now. Since miners usually take out their BTC for dumping purposes, this trend can be bearish for the value of the crypto. On the other hand, low values suggest miners are spending relatively little amounts currently.

The below chart shows the trend in the Bitcoin miner selling power over the last few years:

Bitcoin Miner Selling Power

As the above graph displays, whenever the Bitcoin miner selling power has reached high values and set a local peak, the price of the crypto has seen some downtrend. This trend makes sense as highs in the metric suggest increased selling pressure from these chain validators.

Recently, the indicator again showed such a formation, and BTC reacted with a decline this time as well, as its price went from more than $18,000 to the current $16,000 level. However, since this recent peak, the miner selling power has been rapidly going down and has now set a new low.

This muted selling pressure from miners may not necessarily be bullish by itself, but it does mean that if Bitcoin shows any bullish momentum now, miners wouldn’t provide any impedance to it for the time being.

An interesting long-term trend to notice in the miner selling power chart is that the metric has been on an overall downtrend in the last five years or so. This means that over time, miners have been selling lesser and lesser BTC compared to their reserves, suggesting that they have been accumulating and growing their supply instead.

BTC Price

At the time of writing, Bitcoin’s price floats around $16,800, up 1% in the last week.

Bitcoin Price Chart

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Bitcoin Bearish Signal: MPI Records Highest Value Since April 2022

On-chain data shows the Bitcoin MPI has surged to its highest value since the April of this year, a sign that may prove to be bearish for the crypto’s price.

Bitcoin Miners’ Position Index Has Spiked Up During Past Day

As pointed out by an analyst in a CryptoQuant post, this instance is the fifth time that the metric has sent a warning signal.

The “Miners’ Position Index” (or the MPI in short) is an indicator that measures the ratio between the miner outflows in USD, and the 365-day moving average of the same.

Generally, miners transfer coins out of their wallets (that is, make outflow transactions) for selling purposes. Thus, the MPI can tell us whether miners are selling more or less right now compared to their past year average.

When the value of this metric is high, it means miners are dumping more than usual currently. On the other hand, low values suggest these chain validators aren’t doing any heavy selling at the moment.

Now, here is a chart that shows the trend in the Bitcoin MPI over the past year and a half:

Bitcoin MPI

The value of the metric seems to have been pretty high recently | Source: CryptoQuant

As you can see in the above graph, whenever the Bitcoin Miners’ Position Index has crossed above a value of 2 during the past year, the price of the crypto has seen a decline shortly after.

There have been five such spikes in 2022 so far, the latest of which has only just been recorded in the last 24 hours.

This current surge has now taken the indicator’s value to the highest level since the spike back in April of this year.

When this previous spike was seen, Bitcoin was above $45k, but only a week later the crypto had crashed below $40k.

If the latest rise in miner selling also follows the same trend as back in April, then BTC may observe some downtrend in the coming days.

BTC Price

At the time of writing, Bitcoin’s price floats around $16.9k, up 3% in the last week. Over the past month, the crypto has lost 17% in value.

Below is a chart that shows the trend in the price of the coin over the last five days.

Bitcoin Price Chart

Looks like the price of the crypto has retreaded below the $17k level again | Source: BTCUSD on TradingView

Bitcoin has surged up in the last few days, but it’s unclear whether this rise will last, given the recent increased selling pressure from the miners.

Featured image from Hans-Jurgen Mager on Unsplash.com, charts from TradingView.com, CryptoQuant.com

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Bearish Signal: Bitcoin Miners Dump 7,700 BTC In One Week

Bitcoin miners are usually some of the longest holders of BTC but that is usually when the bull market is in full swing and they do not have to worry about cash flow. Currently, the cash flow on bitcoin miners has plummeted and as the price of the digital asset continues to trend low, bitcoin miners have been put in a tight spot. In response, the miners have taken to dumping their coins in order to keep their operations going.

Selling Off 7,700 BTC

Since the crypto winter first began following the Terra Network collapse in May, Bitcoin miners have increasingly turned to sell off their BTC holdings in order to survive. Over the last couple of months, the amount of BTC miners having to sell has been increasing.

With the most recent crypto market decline, miners have reportedly offloaded more than 7,700 BTC in a 7-day period, according to a Glassnode report. This translates to the highest dump by miners in a 4-year period, leading to a sharp decline in their balances. In total, there was 7,761 BTC sold by these miners. Miner BTC balances were down by 10% in this 7-day period, and this brings their balances to close to a one-year low. 

Bitcoin miners

Miners sell off BTC | Source: Glassnode

The chart shows that the sharp decline is correlated with the decline in bitcoin prices. So miners are continuing to follow historical trends, where they hold when the price is on the mend and sell off their coins during periods of low prices.

Why Bitcoin Miners Are Selling

The decline in bitcoin price is the primary reason behind the sell-offs being carried out by these miners. Not only do low BTC prices affect the profit margins of their mining machines, but it also affects investor sentiment during this time. 

Bitcoin price chart from TradingView.com

BTC at $16,600 | Source: BTCUSD on TradingView.com

Since investors are still very wary of investing in crypto, the shares of bitcoin mining companies have plummeted significantly. This means mining companies are having to turn to their BTC reserves in order to have enough cash flow for their businesses.

Related Reading: TRX Surges Over 600% Following Justin Sun’s Deal With FTX

Miners are also likely to continue selling BTC given that the market has not given any indication of hitting a bottom yet. If prices go lower, more miners will have to sell to realize some cash flow. In the meantime, these miners are putting more supply into a market that does not have enough demand to soak it up. Given this, the price of bitcoin is likely to continue its decline as the FTX debacle unfolds slowly over the next couple of months.

Featured image from CNBC, chart from TradingView.com

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Bitcoin Miner Selling Power At Lowest For 2022, Green Sign For Market?

On-chain data shows the Bitcoin miner selling power is at its lowest for the year, something that could be favorable for the price of the crypto.

Bitcoin Miner Selling Power Has Been Going Down In Recent Weeks

As pointed out by an analyst in a CryptoQuant post, the metric has observed surges in its value a few times this year, and each time the BTC price has gone down.

The “miner selling power” is an indicator that’s defined as the ratio between the Bitcoin miner outflows and the total number of coins held by this cohort (30-day moving average, log-scaled)

Here, the “miner outflows” is a measure of the total amount of BTC that miners are transferring out of their personal wallets.

When the value of the miner selling power rises, it means the ability of miners to dump their coins is going up right now as they are withdrawing more of them from their reserve. Naturally, such a trend can be bearish for the value of the crypto.

On the other hand, low values of the indicator suggest miners aren’t putting much selling pressure on the market at the moment, and hence might prove to be bullish for the BTC price.

Now, here is a chart that shows the trend in the Bitcoin miner selling power (log-scaled) over the year 2022 so far:

Bitcoin Miner Selling Power

Looks like the log-scaled value of the metric has been on the way down recently | Source: CryptoQuant

As you can see in the above graph, the quant has marked the relevant points of trend for the Bitcoin miner selling power.

It seems like during the past year, the indicator has observed three instances of sharp growth, and around the time of each of these surges, the price of the crypto has taken a beating.

In the last few weeks, the metric has been on a constant decline, suggesting that miners haven’t been selling much during the period.

As a result of this downtrend, the Bitcoin miner selling power has now reached its lowest value for the last year. Going by the previous trend, this could be a positive sign for the current rally in the crypto.

BTC Price

At the time of writing, Bitcoin’s price floats around $20.5k, up 6% in the last week. Over the past month, the crypto has gained 5% in value.

The below chart shows the trend in the price of the coin over the last five days.

Bitcoin Price Chart

The value of the crypto seems to have been moving sideways between $20k and $21k | Source: BTCUSD on TradingView
Featured image from Brian Wangenheim on Unsplash.com, charts from TradingView.com, CryptoQuant.com

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Bitcoin Mining Difficulty Adjustment May Force Miners To Dump Their BTC

Last week, the bitcoin hashrate touched a new all-time high after tremendous growth. While this was a welcome development, it had significant implications for the next mining difficulty adjustment which took place on Monday. As expected, the difficulty adjustment had jumped by double-digits, beating even the highest of forecasts.

Difficulty Adjusts By 13.5%

Over the last week, the forecasts for the bitcoin mining difficulty adjustment put it at a high of

9-12%. These ranged from the conservative side to the worst-case scenario, but either way would see the network mark the highest difficulty adjustment so far for the year 2022. However, even these predictions did not do justice to the actual adjustment.

 

On Monday, the mining difficulty (how many hashes it takes to mine a BTC block) jumped from 31.36T to 35.61T, a 13.5% increase. This higher difficulty adjustment is in line with the increasing mining power as more bitcoin miners bring their machines online.

Mining difficulty adjusts by 13.5% | Source: Coinwarz

Interestingly, the bitcoin mining difficulty is not expected to ease up anytime soon. The next difficulty adjustment will take place on Sunday, October 23, 2022, with another expected increase of 11.3%. In the next three months, the mining difficulty is expected to increase by 22.5%.

As for the bitcoin hashrate, it has seen some decline since it hit its all-time high of 321 EH/s. It is currently sitting at 291.4 EH/s at the time of this writing, a high number for the year 2022.

Will Bitcoin Miners Dump BTC?

The high difficulty adjustment will no doubt impact bitcoin miner profits during this time. This means that they would have to dispatch more computing power and more energy to mine a block, which affects their bottom line. Add in the fact that the bitcoin price is struggling to maintain above $19,000, and miners are sitting in a tight spot.

BTC settles above $19,000 | Source: BTCUSD on TradingView.com

Since the start of the year, there have been times when some bitcoin miners have been forced to dump their BTC holdings to fund their operations and this adjustment could trigger another sell-off trend among them. Since it costs them a little over $18,000 to mine a single BTC, bitcoin’s tapdance below $19,000 put them dangerously close to recording losses on their mining machines, which could lead to sell-offs.

Bitcoin miner revenues are currently sitting at $17.16 million per day. With 6.25 BTC mined at an average of 10 minutes, miners are producing a total of 900 BTC each day.

Featured image from Bloomberg, chart from TradingView.com

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What Does Puell Multiple Say About Current Bitcoin Bear?

Puell multiple is an indicator that has historically given hints about previous Bitcoin cycles, here’s what it says about the current bear market.

Bitcoin Puell Multiple Has Been Going Up During The Last Couple Of Months

According to the latest weekly report from Glassnode, miners are currently raking in just 63% of the revenues of last year.

The “puell multiple” is a metric that measures the ratio between the current Bitcoin miner revenues, and the 365-day moving average of the same.

What this indicator tell us is how the miner revenues right now compare with the average during the last year.

When the value of the multiple is greater than 1, it means miners are earning more currently than the average for the past 365 days.

On the other hand, the metric having values lesser than the threshold suggests miner incomes are lower at the moment.

Now, here is a chart that shows the trend in the Bitcoin puell multiple over the last few years:

Looks like the value of the metric has been showing a rise in recent weeks | Source: Glassnode’s The Week Onchain – Week 40, 2022

As you can see in the above graph, the historical zones for the Bitcoin puell multiple are highlighted. It seems like during the past cycles, the indicator dipping below the 0.5 value resulted in bottom formation.

After the metric hit the low during the previous bear markets and subsequently recovered out of the zone, the crypto also observed the end of the bear and the start of a fresh bull run.

The likely reason behind this trend is that when miners reach very low revenues, they go through a capitulation phase and once it ends, the selling pressure from them subsides, thus the price observes some growth.

Related Reading: Bitcoin Price Starts Uptober With Record Open Interest Increase, BTC Rally Will Be Short lived?

It looks like back in June of this year, the metric hit a low of just 0.33, implying that miners were earning only 33% of the average for past year at that point.

Since then, however, the multiple has enjoyed an overall trend and has escaped out of the historical bottom zone as its value is now 0.63. This means that miners are under much less stress now compared to just a few months ago.

If history is anything to go by, the current uptrend in the Bitcoin puell multiple could spell the end of the bear market.

BTC Price

At the time of writing, Bitcoin’s price floats around $20k, up 4% in the past week.

The value of the crypto seems to have spiked up over the past day or so | Source: BTCUSD on TradingView
Featured image from Maxim Hopman on Unsplash.com, charts from TradingView.com, Glassnode.com

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Bitcoin Bearish Signal: Miners Continue Transfers To Exchanges

On-chain data shows miners have sent a large amount of Bitcoin to spot exchanges recently, something that can be bearish for the value of the crypto.

Bitcoin Miners To Spot Exchanges Flow Has Surged Up Over The Past Day

As pointed out by an analyst in a CryptoQuant post, the latest spike in the miner exchange deposits is larger than any other recent peaks.

The relevant indicator here is the “miners to spot exchanges flow mean,” which measures the total amount of Bitcoin being transferred by miners to spot exchanges.

When the value of this metric shoots up, it means miners have just sent a large number of coins to exchanges. Since these chain validators usually deposit to spot markets for selling purposes, this kind of trend can prove to be bearish for the price of BTC.

On the other hand, the value of the indicator being low suggests there aren’t many transactions happening from miner wallets to centralized exchange wallets. Such a trend can be either neutral or bullish for the value of the coin as it implies there isn’t much selling pressure coming from this cohort right now.

Now, here is a chart that shows the trend in the Bitcoin miners to spot exchanges flow mean over the last couple of weeks:

The hourly value of the metric seems to have been quite high in recent days | Source: CryptoQuant

As you can see in the above graph, the Bitcoin miners to spot exchanges flow mean has observed a huge spike during the past day.

The last two weeks saw several exchange inflows coming from miners, after each of which the price generally suffered a short-term decline.

This latest increase in the miner spot deposits is significantly larger than any other seen in this period, and has come while the price has already plunged down. This is unlike the previous ones, which came as the price was around a peak.

If the same trend as the previous miner exchange inflows follows this time as well, then these fresh deposits are also likely to have a bearish impact on Bitcoin.

BTC Price

At the time of writing, Bitcoin’s price floats around $20.1k, up 4% in the last seven days. Over the past month, the crypto has lost 17% in value.

Below is a chart that shows the trend in the price of the coin over the last five days.

Looks like the value of the crypto plummeted down a few days back and has since moved sideways | Source: BTCUSD on TradingView
Featured image from Brent Jones on Unsplash.com, charts from TradingView.com, CryptoQuant.com

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Public Bitcoin Mining Firms Are Nearly Out Of Coins To Sell

Public bitcoin mining firms have been caught between a rock and a hard place with the decline in bitcoin prices. As their cash flow had declined significantly, they had turned to sell BTC to be able to keep up with the costs of their operations. The massive stash of BTC that these public miners had stacked up during the incredible year of 2021 is now making its way to the market. But they are quickly running out of coins to sell.

Bitcoin Miners Dump Coins

Over the last three months, there have been reports of Bitcoin miners dumping thousands of BTC. The volume of BTC being sold was alarming because they were more than the miners were producing in a month.

On September 2nd, blockchain data aggregation firm CryptoQuant revealed that bitcoin miners had sold about 4,586 BTC in 3 days. At the time, bitcoin’s price was trending just above $20,000, bringing the dollar value of the sale to more than $93 million at the time.

In the month of July, public bitcoin miners had sold off a collective 5,700 BTC. The trend would continue into the month of August as miners continued to offload more questions. By the third week of August, they had dumped more than 6,000 BTC.

By selling their stash of BTC, public bitcoin miners have been able to keep bankruptcy at bay. However, their stash of BTC is not bottomless, and they are running out of coins to sell.

Miners’ Balances Run Low

Public bitcoin miners have now sold a healthy part of their balance sheets at this point. The sales have been understandable given the state of the market, but miners are now facing another problem, and that is the fact that they are running out of BTC to sell.

Since they have been selling more BTC than they have been producing, their balances have taken a hit. The companies which have suffered the most have been Marathon Digital and Hut 8. At the end of March 31st, before they started selling BTC, both of these miners had massive balances. In the last three months, Marathon Digital has sold over 60% of its BTC holdings, along with Stronghold. Hut 8 has sold around 40% of its holdings, while Core Scientific has sold around 33%.

Miners running out of BTC to sell | Source: Arcane Research

However, not all miners have followed this trend. In fact, some miners have taken this time to increase their holdings. Riot Blockchain is an example of a public bitcoin miner that grew its holding in the last 3 months by almost 100%. Cleanspark also recorded about a 15% increase in its BTC balances.

Despite these miners having to sell large quantities of BTC, the majority continue to do well financially. The only one on the list seeing deep financial struggles is Stronghold, and this has to do with the fact that the company did not have much in the way of a large BTC balance, to begin with.

Featured image from Vecteezy, charts from Arcane Research and TradingView.com

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Bearish Signal: Why Bitcoin Miner Sell-Offs May Continue

Bitcoin miners have borne the brunt of the bear trend since it began. They watched cash flow plummet on their machines, forcing them to look to other ways to finance their operations. The natural response to this was for public miners to dip into their bitcoin reserves and begin selling off BTC to keep their operations going. For a time, it seemed miners would stop selling due to the recovery in price, but this is proving not to be the case.

Miners Offload More BTC

Bitcoin miners had sold off more bitcoin than they had mined for the first time in May. The same trend then continued into June, when miners had sold thousands of BTC to cover operational and other costs. It seems this trend did not end in the month of June either, as the miners continued to sell off coins.

Data shows that bitcoin miners had actually sold 5,700 BTC in the month of July alone, the largest sale so far. These bitcoin miners had once again sold more BTC than they had actually produced. In total, it was reported that 3,470 BTC was produced for the month, meaning they sold 50% more bitcoin than they mined.

These bitcoin miners had sold more during a month when some had to shut off operations due to rising temperatures. However, one of those miners had been able to turn it around by making more money from selling energy credits to the Texas government than they would mining. The largest sellers were ousted to be CoreScientific with 1,970 BTC and BitFarms with 1,600 BTC.

BTC recovers above $24,000 | Source: BTCUSD on TradingView.com
Bear Trend For Bitcoin

Bitcoin miners are often among the largest whales in the market. This means that whatever actions they take in regards to their portfolios can often have an impact on the market. It is evident when miners are not forced to sell their BTC that the price of the digital asset continues to rise, and the reverse is the case when they dump their coins.

The sell-offs have all come due to the reduced revenue realized on a daily basis, and with no significant rise in miner revenues, it is expected that miners are going to have to keep selling. Daily miner revenues for the last week were muted with only a 1.58% growth, seeing them bring in $21.89 million.

If there is to be any reversal in this selling trend, bitcoin miners would have to see more cash flow from their mining activities. However, as the price remains low, these miners are realizing less, dollar-wise, compared to a few months ago, while expenses such as electricity and machines remain the same or even higher in some cases.

Featured image from Analytics Insight, chart from TradingView.com

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Bitcoin Miner Revenues Continue To Grow, Will This Put A Stop To The Sell-Offs?

Bitcoin miner revenues have been a hot topic of discussion in the last three months. It mainly follows the decline in cash flow of mining machines due to the drop in the price of BTC, and that has adversely affected the revenues of bitcoin miners, seeing them drop to yearly lows. However, as the market has recovered some of its lost value, bitcoin miners are starting to fare better in terms of revenues, which could be the plug to the recent sell-offs.

Miner Revenues Grow

Bitcoin daily miner revenues had dropped to the $17 million level during the lowest point. At this time, bitcoin miner revenues were dropping in double-digit percentages following the plunge in BTC’s price. It would, in turn, trigger massive sell-offs from miners as they scrambled to keep their operations going. 

The miner revenues are now rebounding following the price increase. Last week, the price of BTC had grown to more than $24,000, and this increase is being reflected in miner revenues. According to data from Arcane Research, daily miner revenues had jumped 5.32% from the previous week’s $20.4 million to last week’s $21.55 million. This reversal in the declining trend has once more helped miners to become more gas flow positive, albeit by a small margin.

However, the daily miner revenue would be one of the only few bitcoin metrics to be green for last week. The percentage of miner revenues made up by fees declined significantly, falling 0.68%, as fees per day declined 28.12% to $317,246 from the prior week’s $441,342.

BTC retakes $23,000 | Source: BTCUSD on TradingView.com

The daily transaction volumes were also down, which explains the drop in fees realized per day. Transaction volume was down 14.38% for the week, while average transaction value was down 15.66% to come out at $254,429.

Will Bitcoin Miners Stop Selling?

Bitcoin miners have had to offload thousands of their mined BTC to fund their operations. The months of April and June had seen bitcoin miners selling off more BTC than they had produced for the month for the first time ever. It marked the beginning of the sell-off trend for these bitcoin miners.

By now, bitcoin miners have sold more than 4,000 BTC due to declining profitability. However, with the rebound in miner revenue, it is possible that there may be a slowdown in the sell-offs, particularly for public miners.

One of the reasons that could put a stop to it is the increase in the value of mining stocks as BTC grows. An example is the Marathon Digital stock which is up more than 28% from its last week’s low. MARA is currently trading at $12.96 after hitting a low of $10.08 last week.

Featured image from Bitcoinist, chart from TradingView.com

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Bitcoin Miner Revenues Continue To Plunge, But Will The Rally Change This?

Bitcoin miner revenues have been plummeting ever since the price of BTC peaked back in November. This has put miners in a tight spot, causing a good number of them to sell their BTC holdings in order to keep financing their operations. The same was the case for last week, where miner revenues were once again in the red. However, as the tide begins to change in the crypto market, there may be light at the end of the tunnel for miners.

Miner Revenues Down 4%

For the past month, daily miner revenues have been trending above $18 million but continued recording losses with each passing week. Last week would put an end to this trend when miner revenue fell once again, this time by 4.03%, causing average daily revenues to drop below $18 million. Reports show that miners saw an average of $17.7 million in revenues, more than 60% down from its peak back in November.

Related Reading | Ethereum Classic (ETC) Reclaims $3 Billion Market Cap, More Upside To Follow?

What followed this was a sell-off from bitcoin miners across the space. As the profitability plummeted, more BTC had to be offloaded by miners to provide cash flow for their operations. In June alone, miners had sold off 25% of their holdings, and with the prices remaining low, reports for July are expected to show even higher sales for the month of July.

For the last two months, bitcoin miners have been selling more BTC than they were producing. For the month of May, they had sold more than 100% of the BTC produced. This number had jumped 400% in June when public miners sold approximately 14,600 BTC when they had only produced a total of 3,900 BTC, accounting for 25% of all of their holdings.

BTC drops to $22,700 | Source: BTCUSD on TradingView.com

Surprisingly, fees per day were up 12.61% last week, which brought the percentage of revenue gotten from fees to 2.59%, a 0.38% increase from the prior week.

Will The Bitcoin Rally Help?

The recent rally in the market has seen the price of bitcoin reclaim key technical levels and reach one-month highs. The digital asset had even briefly touched above $24,000 before trending back down, and the first half of the week had been green for the digital asset.

Related Reading | Why Bitcoin Must Beat $25,500 To Establish A Bull Rally

Since the profitability of bitcoin mining is directly tied to the price of the digital asset, it is safe to assume that there may be some uptick in miner revenues for this week. Given that price was trending around $19,000 for most of last week, an increase above $22,000 will see public bitcoin miners realize more revenue from their mining operations.

However, given that the price had not recovered by a wide margin, the rise in daily miner revenue is expected to remain under double-digits. It is also important to note that there is more demand for block space, leading to higher transaction fees on the network, contributing more to the daily miner revenues.

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Capitulation: Public Bitcoin Miners Dump 25% of BTC Holdings Last Month

Data shows public Bitcoin miners dumped around 14.6k BTC during the month of June, which is about 25% of their total holdings.

Bitcoin Public Miners Capitulate As Mining Revenues Stay Quite Low

As per the latest weekly report from Arcane Research, BTC miners sold almost 400% of their production during the last month.

Miners pay off their electricity bills, expansions, and other running costs using dollars. As such, the USD value of their Bitcoin rewards is the more relevant metric for them.

Since the price of the crypto has been in a state of decline during the last few months, times have been hard for the miners recently.

Even so, the large public mining companies still held onto their treasuries through January to April, selling only 20% to 40% of what they mined during the period, and accumulating the rest.

This, however, couldn’t continue in May when the value of Bitcoin took a large hit from $40k down to $30k. Miners had to start liquidating their holdings to fund their expenses, and in total they sold more BTC than they produced during the month.

Related Reading | How Will A New DeFi Protocol Like Uniglo (GLO) Compete With Bitcoin (BTC), Binance Coin (BNB), And Ethereum (ETH)?

The below chart shows the amounts public Bitcoin miners sold in each month of the year so far.

Looks like these companies have heavily sold their treasuries during the past month | Source: Arcane Research’s The Weekly Update – Week 28, 2022

As you can see in the above graph, the Bitcoin dumping from the public miners in June far surpassed the selling that took place in May.

In June, these mining companies mined a collective 3.9k BTC, but they sold over 14.6k BTC at the same time. This means that they dumped just under 400% of their total production for the month.

Related Reading | Bitcoin Dominance Dives As Ethereum Takes Up More Space

As a consequence of this selling, the BTC holdings of the public miners have shrunk by around 25%. The report notes that some miners have even sold almost all their treasuries, while others haven’t liquidated much.

Core Scientific was the biggest seller during the months of May and June, selling around 10k BTC. Bitfarms followed up Core Scientific as 2nd, dumping more than 3.3k BTC in June.

BTC Price

At the time of writing, Bitcoin’s price floats around $23.8k, up 24% in the last seven days. Over the past month, the crypto has accumulated 17% in value.

The below chart shows the trend in the price of the coin over the last five days.

The value of the crypto has surged up over the last couple of days | Source: BTCUSD on TradingView
Featured image from Michael Förtsch on Unsplash.com, charts from TradingView.com, Arcane Research

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Bitcoin Barrels Towards $24k As Miners Move $300 Million From Wallets

Given that the price of Bitcoin has been lingering above the $17K–$20K range over the past few weeks, Bitcoin’s sharp downturn has come to an end. The price is currently retesting the $23K resistance level after being rejected three times from the $20K support area.

Bitcoin Advocates Rejoice

The market flashed its first significant relief rally in at least a month, and crypto enthusiasts rejoiced at the sight of green on July 19 as the months of “down only” price action finally came to a stop.

According to TradingView data, Bitcoin’s (BTC) breakthrough over resistance at $23,000 to reach a daily high of $23,447—its first appreciable move above the 200-week moving average—is largely responsible for the renewed optimism.

The $23K level is also experiencing extra opposition from the 50-day moving average. A further retest of the $20K support level and perhaps a deeper negative continuation are anticipated in this situation because it appears as though these two points are currently rejecting the price’s move downward. The bulls, though, seem keen to seize the level.

BTC/USD barrels towards $24k. Source: TradingView

In order to assess the likelihood of a negative reversal, the price action on the lower timeframes should be closely monitored throughout the course of the following few days. A rally into the $30K supply zone is the next move, especially if a bullish breakthrough happens above the $23K-$24K range.

While many have predicted a rise to the mid-$30,000 area, several analysts have expressed concern that it might just be another fakeout pump.

“Weekly Candle Close Above $22,800”

Rekt Capital, a cryptocurrency analyst, posted the following chart with the comment that “For the first time in weeks, BTC is putting in a decent effort to try to reclaim the 200-week MA as support.” The analyst has been paying close attention to the move back above the 200-week MA.

Related Reading | Mid Cap Crypto Coins Lead In July, Best Way To Weather The Winter?

In recent weeks, the 200-week MA has received a lot of attention since it has traditionally acted as a dependable bear market indicator that has given insight into when a bottom has been set.

As per Rekt Capital,

“BTC needs to Weekly Candle Close above $22800 to successfully confirm a reclaim of the 200-week MA as support.”

Miners Capitulate

Miners have entered the capitulation phase, who have started to slightly distribute their holdings. The hashrate of Bitcoin has been in a minor downturn following a new all-time high during the previous shakeout, exhibiting the same behavior.

Within a 24-hour period, cryptocurrency miners removed up to 14,000 bitcoin, each worth $300 million, from their wallets.

Due to the recent decline in the value of many digital currencies, miners sold their bitcoin holdings.

Source: CryptoQuant

This minor fall in the hashrate is expected given that Bitcoin’s price is currently approximately 74% off its all-time high and that mining may not be profitable for many miners and pools. But despite the current price correction’s size, the hashrate is still doing fairly well. In the past, the bear market’s ultimate phase has been identified by the capitulation of the miners. Therefore, there is a strong likelihood that Bitcoin will soon reach its long-term bottom and start a fresh uptrend toward higher price levels.

Related Reading | Bitcoin Marks One Month Of Negative Funding Rates, More Decline Incoming?

Featured image from iStock Photo, charts from TradingView.com and CryptoQuant

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Bitcoin Miners Send 14K BTC To One Block. Bullish News For The Market?

After the official US inflation numbers were released, bitcoin prices started to rise. However, during the previous month, the BTC miners have increased their outflow.

A new set of tax policies targeted at preventing domestic cryptocurrency mining were unveiled by Kazakhstan, which is still a significant nation in the world of Bitcoin mining.

During a halt in worldwide activity and fire sales connected to recent bankruptcy-related news, prices for Bitcoin mining rigs are also said to have fallen to epidemic lows for 2020.

Most significantly, Texas power grid operators have asked all Bitcoin miners to cease operations in order to lessen the strain on a power grid that is already overloaded.

Bitcoin Miners Inflow Reach New ATH

IT Tech reports that Bitcoin miners transferred over 14,000 BTC to an exchange in a single block. The transfer from the miner wallet to the exchange was noted as being unfavorable for the market. According to their definition of mining pool wallets in their stats, all pool members—including the specific miner—are included.

One user did point out that those Bitcoin were not reflected in the spot market or derivatives, though. Glassnode reported that the BTC Miners’ Netflow Volume on a 7-day moving average (MA) basis hit an all-time high (ATH) of $1,779,953. In the first week of January 2022, an ATH of $1,700,940 was registered.

This outflow did not stop on the exchange wallet, according to Ki Young Ju, CEO of CryptoQuant. It will probably end up in a custodial cold wallet. This can be utilized as an OTC deal or as a custodial service. In his opinion, the news is either bullish or neutral.

Related Reading | Mid Cap Crypto Coins Lead In July, Best Way To Weather The Winter?

Price May Surge?

Additionally, open interest is increasing, according to IT Tech, and the market may soon experience growth. The Bitcoin miner reserves have decreased during the last two weeks, according to the study. This, however, may be a significant sign of waning confidence in a price turnaround.

Within the past 24 hours, the price of bitcoin has increased by more than 6%. BTC is currently trading for $20,953 on average. Its 24 hour trading volume is up by 2% to stand at $32.8 billion.

BTC active addresses have grown during the past 24 hours, says Santiment. The number was close to a million at press time, compared to 860,000 on July 14. This demonstrates that investor mood is quickly improving.

Source: Santiment

The volume, which changed from 28.13 billion to 31.64 billion, is in a comparable scenario. For Bitcoin maximalists, the increase in price over the past 24 hours on July 15 may be a sign of relief. In reality, at the time of writing, Bitcoin’s market cap has increased from $376 billion to $395 billion.

BTC market cap surges. Source: TradingView

In the meantime, Anthony Pompliano said in his analysis that the price of bitcoin is declining due to rising inflation. It may be accurate, he continued, that it is not a strong hedge against CPI.

Related Reading | Bitcoin Price Spends Four Weeks At 2017 Peak Prices, What Comes Next?

Featured image from Pixabay, charts from TradingView.com and Santiment