On-chain data shows that Bitcoin Hashrate has seen a setback recently, a possible indicator that miners may not believe the asset’s run will continue.
Bitcoin mining hash rate has been declining since its all-time high
“Hashrate” refers to a metric that tracks the total computing power of miners currently connected to the Bitcoin network. The value of this indicator is measured in terms of hashes per second (H/s) or the larger and more practical terahashes per second (TH/s).
When the value of this metric increases, it means that new miners are joining the network, and old miners are expanding their farms. This trend indicates that blockchain represents a lucrative opportunity for these chain validators.
On the other hand, a declining indicator indicates that some miners have decided to disconnect their rigs from the network, perhaps because they cannot break even anymore.
Now, here’s a graph showing the trend in the 7-day average of Bitcoin mining hash rate over the past year:
As shown in the chart above, Bitcoin’s 7-day average hash rate rose sharply earlier and set new highs. However, the metric has declined since peaking near the 755 million THA/s mark at the beginning of this month.
The previous uptrend in the index was due to the positive price action that the asset was enjoying, as the price is directly linked to the revenues of the miners.
There are two ways this chain can be monetized: transaction fees and end-to-end support. The former depends on traffic conditions and can change significantly from day to day. On the other hand, the latter has very specific limitations associated with it.
The block backing holds BTC’s value constant for about four years, at the end of which an event called a halving completely halves the value. These rewards are also awarded at a fairly fixed rate, which means that miners’ daily support income in terms of BTC always remains completely predictable.
However, there is one variable that is free to change, which is the USD value of these bonuses. As the price rises, support revenues for miners also rise. This is why Hashrate tends to see growth in bullish periods.
Bitcoin has been exploring new highs recently, but interestingly, Hashrate has remained silent. The index amounts to about 723 million, meaning that it has decreased by more than 4% since the peak. This trend may indicate that miners expect the current rally to hit a snag.
Bitcoin price
At the time of writing, the price of Bitcoin is around $91,900, up more than 8% in the past seven days.
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