Will miners’ confidence in Bitcoin finally pay off?

• Apart from hashrate, Bit­coin min­ers’ rev­enue also rose in the recent past. 
• BTC was up by more than 4% over the last week, along with an increase in volume. 

Bitcoin’s [BTC] min­ing indus­try reg­is­tered a mas­sive move­ment that brought it into the lime­light once again. Notably, the blockchain’s hashrate saw the kind of spike nev­er seen before in a sin­gle day. 

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Typ­i­cal­ly, a hike in hashrate means that more min­ers are enter­ing the net­work. How­ev­er, will this influx be enough for the king of cryp­tos to kick­start its next bull rally?

A closer look at Bitcoin’s mining sector

James V. Strat­en, a pop­u­lar researcher and data ana­lyst, post­ed a tweet on 18 Sep­tem­ber that point­ed out an inter­est­ing development.

The best way to observe the #Bit­coin hash rate is at least a 7/14 SMA.

But we saw a god can­dle on Fri­day with a hash rate, that took it to over 500eh/s, the pri­or day, it was at 400 eh/s.

Sin­gle biggest one-day hash rate, the net­work has ever seen. 

As a result, the… pic.twitter.com/71C0tgKmK1

— James V. Strat­en (@jimmyvs24) Sep­tem­ber 18, 2023

As per the tweet, a god can­dle last Fri­day pushed BTC’s hashrate to over 500 Eh/s from 400 Eh/s in just a sin­gle day. This was a tremen­dous jump, reflect­ing an inflow of new min­ers into the industry.

Source: Coin­warz

Even though BTC’s hashrate had declined slight­ly, it was still rel­a­tive­ly high at press time, stand­ing at over 388 Eh/s. How­ev­er, it was intrigu­ing to note that, as per Coin­warz, despite the sub­stan­tial surge in the blockchain’s hashrate, its min­ing dif­fi­cul­ty chart remained flat at 54.15 T. 

Why is miners’ interest in Bitcoin growing?

As BTC’s min­ing sector’s strength ris­es, it’s also cru­cial to exam­ine why min­ers are enter­ing the indus­try. Though there might be mul­ti­ple vari­ables at play, one like­ly fac­tor is that they are expect­ing high­er prof­it margins. 

In fact, a look at Glassnode’s data revealed that this might actu­al­ly be the case. Notably, over the last few months, min­ers’ rev­enue took a side­ways path, which could some­what be attrib­uted to the bear­ish market. 

How­ev­er, the trend changed in the last few days. As per the lat­est data, BTC’s min­ers’ rev­enue start­ed to gain upward momen­tum since the begin­ning of this month and reg­is­tered a promis­ing spike on 15 September. 

Inter­est­ing­ly, this hap­pened on the same day when the blockchain’s hashrate surged.

Source: Glassnode

Miners have faith in BTC

A look at Bitcoin’s min­ing met­rics sug­gest­ed that the min­ers’ faith in BTC was also show­ing pos­i­tive signs. How­ev­er, the met­rics were not evi­dent right off the bat.

For instance, Glassnode’s data revealed that BTC’s min­er net posi­tion change turned red. This indi­cat­ed that min­ers were sell­ing their hold­ings. How­ev­er, upon clos­er inspec­tion, a dif­fer­ent side of the sto­ry was revealed. 

As per Cryp­to­Quant, BTC’s Min­ers’ Posi­tion Index (MPI) and Puell mul­ti­ple remained in a neu­tral state, mean­ing that sell­ing pres­sure on BTC from min­ers was mod­er­ate at press time. 

More­over, after a sharp dip on 2 Sep­tem­ber, the min­ers’ bal­ance ascend­ed once again. This sug­gest­ed that they were once again hold­ing their assets, reflect­ing min­ers’ con­fi­dence in BTC’s bull rally.

Source: Glassnode

Will miners’ confidence be enough for Bitcoin?

Min­ers’ trust in BTC might have already start­ed to show its effect in real­i­ty, as BTC’s price chart turned green. In fact, after quite some time, the king of cryp­tos was able to cross $26,000 and even touched $27,000 for a short while. 

As per Coin­Mar­ket­Cap, Bit­coin was up by more than 4% in the last sev­en days. At the time of writ­ing, it was trad­ing at $26,826.77 with a mar­ket cap­i­tal­iza­tion of over $522 bil­lion. The good news was that BTC’s 24-hour trad­ing vol­ume also surged by near­ly 100% in the last 24 hours.

Read Bitcoin’s [BTC] Price Pre­dic­tion 2023–24

In fact, a check of BTC’s dai­ly chart gave more rea­sons to rejoice, as most mar­ket indi­ca­tors were bull­ish. For exam­ple, the MACD’s data clear­ly showed that the buy­ers were lead­ing the mar­ket. Bitcoin’s Rel­a­tive Strength Index (RSI) was rest­ing above the neu­tral mark of 50. 

Addi­tion­al­ly, BTC’s Chaikin Mon­ey Flow (CMF) also reg­is­tered an uptick. Con­sid­er­ing all these mar­ket indi­ca­tors cou­pled with min­ers’ con­fi­dence, a con­tin­ued north­bound price move­ment seemed like­ly in the com­ing days. 

Source: Trad­ingView