Bitcoin On-Chain Activity Bleeds Despite Hash Rate Growth

Bitcoin on-chain activity has fluctuated between green and red for some time. This time, however, after the price of bitcoin had suffered a huge loss, activity on the chain has turned to the downside again. The decline has gone across most of the calculations, which has led to as large as double-digit declines in some of them.

Activity remains low

Bitcoin on-chain activity has left a lot to be desired over the past week. An example of this is the miner’s income. Bitcoin’s daily miner earnings had fallen to a new annual low of $18 million, following bitcoin’s decline to $17,600. There was an improvement in this which brought daily miner earnings back above $20 million, but once again miner earnings have fallen.

For last week, daily miner earnings fell by about 0.10% to $20.7 million. However, this turned out to be the smallest decrease for the same time period. Daily earnings consisting of fees decreased 0.27% to 1.10%. In contrast, transactions per day saw a decrease of 3.78% in the same time period.

BTC rises to $20,100 | Source: BTCUSD on TradingView.com

The biggest drop for last week was recorded for fees per day. The 21.27% decline saw it drop from $265,595 to $209,093. As for the daily transaction volumes. This on-chain metric saw a decrease of 16.70%, falling from $3.356 billion to $2.796 billion. This shows that there are fewer funds being moved across the bitcoin blockchain.

Bitcoin Hashrate Increases

The Bitcoin hash rate was one of the only things that was green for the time period. Where most had registered a decline, block production per hour had increased significantly. The 7.31% pushed the average of 6.18 blocks to 6.64 blocks. This is the only green in the Red Sea. The increase in the discovery rate of bitcoin blocks was most likely the reason for the decrease in transaction fees, leading to the lowest average daily transaction fee since April 2020.

Hashrate recovers amid a sea of red | Source: Arcane Research

Naturally, the hashrate had been on the rise. This last ditch wave in the last week of August saw it rise towards June highs. However, it stalled slightly below the all-time high, but continues to maintain an encouraging upward trajectory.

However, the average transactions per block and the average transaction value decreased. Average transactions per block fell by 3.78% to 1,537, and average transaction value fell 13.43% from $13,195 the previous week to $11,422 last week.

Featured image from Coingape, charts from Arcane Research and TradingView.com

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