Bitcoin miners have always been a reliable indicator of overall sentiment within the market. By tracking their profits and actions, we can get an idea of where the BTC price might head next. In this article, we’ll explore the latest trends in Bitcoin mining, how miners are reacting to current market conditions, and what we can learn from key indicators to gauge how Bitcoin miners will position themselves in the coming weeks and months.
The state of miners’ profits
One of the best ways to assess Bitcoin miner sentiment is to examine their earnings in relation to historical data. This can be done using Multiple Puellwhich measures miners’ current profits against the annual average from the previous year.
According to the latest data, the Puell multiplier is hovering around 0.8, which means miners are earning 80% of what they were earning on average over the past year. This is a marked improvement from a few weeks ago when the multiplier was as low as 0.53, indicating that miners were earning just over half the previous year’s average.
Such a significant decline earlier in the year is likely to put financial pressure on many miners. However, despite these challenges, the fact that the Puell Multiple has recovered suggests that the outlook for miners may be improving.
Hash rate and network growth
Despite the decline in profits, there are no signs of miners leaving the network. In reality, Bitcoin hash ratewhich is the total computational power used to secure the network, is steadily increasing. This increase in hash rate indicates that more miners are entering the network or that existing miners are upgrading their equipment to compete for block rewards.
However, consider Tick bars indicatorwhich tracks the 30-day (blue line) and 60-day (purple line) moving averages of the Bitcoin hash rate, these two averages are approaching a crossover, which could indicate a bearish outlook in the short term. When the 60-day average rises above the 30-day average, it historically signals a miner capitulation, which is a time when miners, under financial pressure, shut down their equipment.
Until we see a bearish crossover, there is no immediate sign of a downtrend. The positive thing is that every time this happens, it is followed by a period of accumulation, which usually precedes a rise in Bitcoin prices. Investors often consider these capitulation periods as great opportunities to buy Bitcoin at lower prices.
How much do miners make?
While we discussed miner profits in relation to the price of Bitcoin, there is another important factor which is: retail pricethe amount of BTC or USD that miners can earn for every terahash (TH/s) of computational power they contribute to the network.
Currently, miners earn approximately 0.73 BTC per terahash, or about $45,000 in US dollars. This amount has steadily declined in the months following the recent Bitcoin halving event, in which miners’ rewards were cut in half, reducing their profitability. Despite these challenges, miners are still increasing their hash rate, indicating that they are betting on the price of Bitcoin to rise in the future to compensate for their lower profits.
One of the most interesting metrics to watch is… Retail price volatilitywhich tracks how stable or volatile miners’ profits are over time. Historically, periods of low volatility in retail prices have been preceded by large movements in Bitcoin prices. As of the latest data, retail price volatility has begun to decline again, indicating that we may be approaching a period of significant Bitcoin price movement.
conclusion
Bitcoin miner profits fell compared to the historical average after the halving, but are recovering from recent significant lows. Bitcoin hash rate is still rising; Which means that miners are injecting more computational power into the network despite lower profitability. The retail price continues to decline, but miners remain optimistic, likely due to the expected price rise in the future. Retail price volatility is declining, which historically indicates that a major move in Bitcoin price may be imminent.
Bitcoin miners appear to be optimistic about the long-term potential of Bitcoin, despite the current challenges. If current metric trends continue, we could be on the verge of a significant price movement, as most indicators point to a positive outlook.
For a more in-depth look at this topic, watch a recent YouTube video here:
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