Bitcoin sees longest miner consolidation period since trading near $16,000

Although the effects of the fourth half are slowly settling in, Bitcoin miners seem to be selling less and holding more BTC after the recent block reward reduction.

In fact, Bitcoin is currently experiencing the longest period of consolidation and miner accumulation since hitting $16,000.

The accumulation of BTC miners continues

According to CryptoQuant’s latest analysis, the Miner Position Index (MPI) and Puell Multiple, which track miner selling activity and profitability respectively, indicate a significant reduction in miner selling pressure after the reduction in half, with 14 consecutive days of consolidation and accumulation. .

Simultaneously, miners are experiencing their lowest income levels in a year. This trend suggests that they are holding their BTC in anticipation of higher prices before selling them.

As Bitcoin ETF spot flows increase and the likelihood of a Q4 rate cut increases, miners are likely to pile up in preparation for a profitable sell-off in the coming months.

The halving reduced mining rewards from 6.25 BTC to 3.125 BTC. Initially, excitement over the event and the launch of Bitcoin Runes kept miners’ earnings up, but that changed in May as earnings dropped significantly.

Data compiled by Blockchain.com suggests that total revenue from block rewards and fees hit a new low of $26.3 million on May 1. Before the halving, miners earned about $6 million a day on average.

Prominent Bitcoin miner Hut 8 reported a 35% drop in its own production in April. Other public mining companies such as Bitfarms, Cipher, CleanSpark, Core Scientific, Riot, and Terawulf also witnessed production drops of between 6% and 12% during the same period.

The Bitcoin network sees increased usage

Meanwhile, CryptoQuant CEO Ki Young Ju highlighted a significant change in miners’ revenue streams due to the development of applications on the Bitcoin network. According to the executive’s findings, transaction fees now contribute more than 7% to miners’ total revenue, a marked increase from 1% two years ago.

Application creation #Bitcoin has significantly changed the income streams of miners.

Transaction fees now account for more than 7% of its total revenue, up from 1% two years ago.

This trend has persisted over the past four weeks and could strengthen the network’s fundamentals. pic.twitter.com/YVbdmLXB5c

— Ki Young Ju (@ki_young_ju) May 7, 2024

This change has been consistent over the past four weeks and could therefore strengthen the network’s fundamentals. Additionally, a total of 458,000 OP RETURN codes were used as of May 6, suggesting growing utilization of the Bitcoin network for purposes beyond basic transactions, essentially indicating wider adoption.

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