Identifying what’s really in store for Bitcoin miners right now
As the crypto winter greatly affected the price of all cryptocurrencies, the mining industry also suffered a huge loss. Bitcoin miners struggled to generate profits in recent months thanks to the same. In fact, skyrocketing electricity prices across the globe were also to blame for this situation.
However, Glassnode’s latest data set seems to suggest that the stress level of miners has decreased, compared to the past few months.
What’s up?
While Ethereum miners are in a tough spot due to ETH’s transition from PoW to a PoS consensus mechanism in September, good news came for Bitcoin miners. After hitting a low in June 2022, the crypto king has been rising steadily ever since. In fact, BTC climbed to as high as $24,000 on the charts. Bitcoin’s price rise played a key role in reducing the stress on miners as their profitability increased somewhat.
Miners’ stress peaked in 2022 during the June crash. The same soon gathers some southbound momentum as BTC saw some rise, gradually welcoming better days for miners in the process. The same has corresponded with a “notable decrease in the distribution of miners to exchanges in recent weeks.”
Miner stress peaked in June as $BTC prices fell below $20k.
However, there has been a noticeable decrease in the distribution of miners to exchanges in recent weeks.
This suggests that although stress is still in the industry, the worst may be behind us.
Diagram: pic.twitter.com/NzeQZbP2PY
— glassnode (@glassnode) 12 August 2022
Also, Bitcoin’s mining difficulty has been on the decline since reaching an all-time high in May. This is also a good sign for miners as they will require less computational power to mine blocks. However, after a 3-month downward trend, there was a slight increase in difficulty earlier this month.
Source: Glassnode
Apart from these, another notable development is that miners’ overall earnings also appeared to increase compared to June, when it hit its lowest level this year. The decrease in stress levels, combined with the increase in miner income, could be a sign of better days ahead for Bitcoin’s mining community.
Source: Glassnode
Investor’s interest
Although this new development is primarily focused on miners, investors can also use this opportunity to make better investment decisions. As suggested by Glassnode’s graph, after being below the 60-day MA for a long time, the 30-day MA showed some degree of trend reversal as it slowly approached the red line.
When the 30-day MA crosses the 60-day MA, it is a positive market indicator that encourages investors to buy more. Therefore, when the green line keeps getting closer to the blue line, there may soon be an opportunity for investors to accumulate more Bitcoins.
Source: Glassnode
