On-chain analysis indicates that the Bitcoin Mining Hashrate has recently achieved a new all-time high (ATH), even amidst the asset’s downward trend.
Recent Surge in 7-Day Average Bitcoin Mining Hashrate
The term “Mining Hashrate” denotes a metric that measures the cumulative computing power that all miners have linked to the Bitcoin blockchain. Miners require this computing power because the BTC network operates on a Proof-of-Work (PoW) consensus mechanism, where validators compete to solve complex mathematical problems to append new blocks to the chain.
Consequently, the Hashrate is an indicator of miners’ sentiment towards the cryptocurrency. An increase in this metric may suggest that miners find the asset appealing, leading to new entrants or existing miners expanding their operations.
Conversely, a decrease in Hashrate may signal that some miners have chosen to detach from the network, possibly due to a belief that BTC mining is no longer profitable.
Below is a chart illustrating the trend in the 7-day average Bitcoin Mining Hashrate over the past year:
It appears that the 7-day average for this metric has been increasing over the past day | Source: Blockchain.com
The graph above indicates that the 7-day average Bitcoin Mining Hashrate surged towards the end of July, establishing a new peak for the metric. However, following this high, the indicator experienced a sharp drop, and it was not until late August that it began to recover.
This recovery was sustained for some time, although the indicator eventually retraced back to its previous lows at the end of the month. The price action of BTC may provide insights into these trends.
Bitcoin miners primarily generate income through the block subsidy received for solving blocks on the network. A characteristic of this blockchain is that these rewards are fixed in BTC and are distributed at regular intervals.
This means that the sole variable affecting them is the cryptocurrency’s USD value. Therefore, an increase in price leads to a corresponding rise in miner revenue. The Hashrate’s late July peak coincided with BTC’s rally towards the $70,000 mark, while the subsequent decline matched a sharp downturn in the asset’s price.
Interestingly, since the beginning of September, the 7-day average Bitcoin Mining Hashrate has continued to rise, even as the price has consistently dropped.
This suggests that miners are displaying confidence and expanding their operations in anticipation of a future price increase. The Hashrate had previously shown a similar upward trend, which preceded the ATH price for BTC.
It remains to be seen whether the current expansion of Hashrate to new ATH levels will prove beneficial for Bitcoin miners once again.
BTC Price
As of this writing, Bitcoin is trading at approximately $55,100, reflecting a decline of nearly 6% over the past week.
The price of the cryptocurrency appears to have been declining over the past few days | Source: BTCUSD on TradingView
Featured image from Dall-E, Blockchain.com, chart from TradingView.com
