Bitcoin miners have always been a reliable indicator of overall market sentiment. By tracking their earnings and actions, we can understand where the price of BTC may go in the future. In this article, we’ll look at the latest trends in Bitcoin mining, how miners are reacting to current market conditions, and what we can learn from key indicators to assess how Bitcoin miners are positioning themselves for the coming weeks and months.
Miner income status
One of the best ways to gauge Bitcoin miner sentiment is to compare their earnings to historical data. This can be done using The Puell Multiple, which measures miners’ current earnings compared to the previous year’s annual averages.
According to the latest data, the Puell Multiple is hovering around 0.8, meaning miners are earning 80% of what they earned on average over the past year. This is a marked improvement from a few weeks ago, when the ratio was just 0.53, indicating that miners were earning just over half of their average for the previous year.
Such a significant drop at the beginning of the year has likely put financial pressure on many miners. However, despite these problems, the fact that the Puell ratio is recovering suggests that the prospects for mining companies may improve.
Hashrate and network growth
Even though revenues have dropped, there are no signs that miners are leaving the network. In fact, Bitcoin’s hashrate, which represents the total computing power used to secure the network, has been steadily increasing. This surge in hashrate indicates that more miners are joining the network or existing miners are upgrading their hardware to compete for block rewards.
However, looking at the Hash Ribbons indicator, which tracks the 30-day (blue line) and 60-day (purple line) moving averages of Bitcoin hashrate, the two averages are approaching a crossover, potentially indicating a bearish outlook. for a short time. When the 60-day average is higher than the 30-day average, it historically indicates miner capitulation, a time when miners, under financial stress, shut down their hardware.
Until we see a bearish crossover, there will be no immediate signs of bearish sentiment. The upside is that each time this happens, it is followed by a period of accumulation, which usually precedes a rise in Bitcoin prices. Investors often view these periods of capitulation as the perfect opportunity to buy BTC at lower prices.
How much do miners earn?
While we have discussed miner earnings based on the price of Bitcoin, another important factor is Hashprice, the number of BTC or USD miners can earn for each terahash (TH/s) of hashing power they contribute to the network.
Currently, miners earn approximately 0.73 BTC per terahash, or about $45,000 in dollar terms. This amount has been steadily decreasing in the months since the last Bitcoin halving event, where miners’ block rewards were cut in half, reducing their profitability. Despite these problems, miners are still increasing their hashrate, which suggests they are betting on future increases in the price of BTC to compensate for their lower earnings.
One of the more interesting metrics to keep an eye on is Hashprice volatility, which tracks how stable or volatile miners’ earnings are over time. Historically, periods of low hash price volatility have preceded significant changes in Bitcoin prices. Based on the latest data, hash price volatility has begun to fall again, suggesting that we may be approaching a period of significant price movement for Bitcoin.
Conclusion
Bitcoin miner earnings have fallen below the historical average since the halving, but they are recovering from recent significant lows. Bitcoin hashrate is still rising; This means that miners are investing more computing power into the network, despite lower profitability. The hash price continues to fall, but miners remain optimistic, likely due to expected future price increases. Hash price volatility is falling, which historically indicates that a big BTC price move may be imminent.
Bitcoin miners appear to be optimistic about BTC’s long-term potential despite the current challenges. If current performance trends continue, we could be on the cusp of a significant price move, with most signs pointing to a positive outlook.
For a more in-depth look at this topic, watch the recent YouTube video here:
What’s next for Bitcoin miners?
