Bitcoin sees massive drop in chain activity

Bitcoin on-chain activity had been lit up like a Christmas tree in the weeks leading up to the Ethereum merger. Although the upgrade did not take place on the bitcoin network, it was still significant for the crypto space, leading to increased activity across various networks. But now that the merger is done and dusted, network activity has started to return to “normal” levels, leading to a slowdown in activity on the chain.

Bitcoin Mining Hashrate Drops

For the first time in two months, the bitcoin mining difficulty had adjusted downward. Due to this 2.1% difficulty downgrade, the block production rate remained low at 5.94 blocks produced per hour. It coincided with the bitcoin hash rate hitting a new all-time high before a reversal was recorded.

Still, the difficult adjustment has come as good news for bitcoin miners who have seen their earnings drop over the past week. Average transaction per block was down 1.55% in a 7-day period from 1,786 to 1,759.

BTC hash rate retraces from all-time high | Source: Arcane Research

Bitcoin’s mining hashrate has now returned to early September levels, showing a return to pre-merger levels. But this hash rate remains on the high side even through this, showing the increased conviction of bitcoin miners during this time.

Revenue takes a hit

Bitcoin miners are still feeling the heat since the bear market has refused to break up. Daily miner earnings have now reached one of the lowest points in the past year, with just over $17 million in daily earnings. This represented a decrease of 4.04% over a 7-day period.

Fees realized per day followed the same downward trend, falling 19.49% to $254,199. This reduced the percentage of revenue comprised of fees by a further 0.28% to come in at 1.48% of all revenue comprised of fees.

BTC price trending at previous peak highs | Source: BTCUSD on TradingView.com

However, the biggest declines for the previous week were recorded in average transaction values ​​and daily transaction volumes. The former had ended up with a decline of 37.61% in the past week, bringing the average transaction value to $12,304. At the same time, daily transaction volumes fell 38.57%, from $5.023 billion to $3.085 billion. This was the biggest drop recorded in the last week. Transactions per day also decreased from $254,696 to $250,755, a decrease of 1.55%.

Bitcoin’s price has also followed this trend and has struggled in the market. It had been unable to regain $20,000 and was now trading stuck at the previous cycle high. Understandably, this has become a major support level for the bulls.

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

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