Asus
- Bitcoin’s hash rate approaches an all-time high, reflecting strong miner confidence despite low revenue and high production costs.
- Trading volumes on exchanges have declined, showing decreased interest from investors and speculators.
- Bitcoin ETFs experience outflows, yet they still attract more attention than Ethereum ETFs.
- Despite challenging market conditions, miners continue to upgrade hardware, increasing both hash rate and mining difficulty.
According to analysts at Glassnode, Bitcoin’s hash rate is nearing all-time highs, showing miner confidence in the network despite low revenues.
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Meanwhile, trading volumes are down, indicating reduced investor interest. Although both Bitcoin and Ethereum ETFs are seeing outflows, the Bitcoin ETFs continue to attract significantly more investor attention, the analysts wrote in a recent note.
Miners Essential for New Coins, Block Discovery
Miners are of course the central actors when it comes to the Bitcoin network, essential for producing new coins and providing network hashing power. They operate in a challenging industry with unpredictable costs for energy and fluctuating Bitcoin prices.
Despite uncertain market conditions, miners have been actively installing new ASIC hardware, driving the hash rate up, nearly reaching the all-time high, Glassnode wrote.
With high hash rates, difficulty to mine blocks has increased to the second highest in the Bitcoin lifespan.
This in turn will negatively impact miner revenue soon, the analysts believe:
The uptick in hash rate and difficulty represents an increasingly expensive production cost for BTC, which may adversely affect miner profitability in the near future.
Glassnode
Trading Volume Falls Below Annual Average
Moving on to exchanges and Glassnode says investors and speculators alike have shown a reduced interest, as seen by reduced on-chain volume.
Running a similar 30d/365d momentum cross-over for exchange-related inflows and outflows, we can see that the monthly average volume has fallen well below the yearly.
Glassnode
Similarly, spot trading on exchanges is down and continues to fall amid the perception that “there has been a notable decline in trade activity over the last quarter”.
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However, while many traders seem to be still in a state of fear, the expected dip for Bitcoin below US$50k (AU$75.2k) did not eventuate. In fact, at the time of writing BTC is closer to the US$60k (AU$90k) mark, trading for US$57,650 (AU$86,634).
Some, like analyst Michaël van de Poppe, believe that the downtrend is over for the moment. Posting on X, van de Poppe said we may see a drop back to US$55k (AU$82.6k) before BTC can make its way back toward US$60k.
#Bitcoin did invalidate my bearish setup and broke through $56K.
I’d like to see this scenario play out, have a slight retest at $55-55.5K, and run up from here to $60-61K in the coming week.
It looks good. pic.twitter.com/780y0yzr3D
— Michaël van de Poppe (@CryptoMichNL) September 10, 2024
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