Data shows Bitcoin miners have experienced some relief recently as mining revenue has now risen to the highest level since June 2022.
Bitcoin Mining Revenue Deviates Significantly From Annual Average
According to the latest weekly report from Glassnode, miners are currently earning $22.6 million per day. The relevant indicator here is “BTC miner earnings,” which measures the total amount of daily USD earnings that Bitcoin miners are making today.
Miners’ income here is defined as the block reward received by the validators of this chain for mining blocks, plus the transaction fees received from individual transfers.
However, for a long time, the average transaction fee in the BTC block remained at a fairly low value, because the majority of the miners’ revenue was contributed by the block reward.
While the block reward remains fixed (until it is halved, which is permanently cut in half), the USD value obviously fluctuates with the price of the asset. Miners are the group that has to pay ongoing costs for their operations (such as electricity bills), and since they make these payments in USD, the dollar-converted income is the right one for them.
Therefore, when the value of the miner’s income metric drops slightly, miners may begin to struggle to make ends meet, and therefore, they may be forced to sell their existing Bitcoin reserves to pay for operational costs or even have to shut down. operation.
Now, here’s a chart showing the trends in Bitcoin miner revenue, as well as the 365-day simple moving average (SMA), over the past few years:
Looks like the value of the metric has been pretty high in recent days | Source: Glassnode's The Week Onchain - Week 12, 2023
As shown in the chart above, daily Bitcoin miner revenue has plunged to a pretty low value below the 365-day SMA last year as the bear market set in. With this year’s general meeting, however, the value of the indicator has been observed some fresh rise and has crossed above the annual average again.
And with the latest rise of the cryptocurrency above the level of $ 28,000, the indicator has reached a value of $ 22.6 million per day, which means that the miners are now making the highest income since June 2022.
In the chart, Glassnode also highlights trends in indicators that have continued in the build-up to some recent bull rallies in the asset. It seems that the metric experienced a big break above the annual average of the last few years during three incidents: May 2019, November 2020, and July 2021.
As you can clearly see in the chart, Bitcoin continues to see some major rallies after the formation of this pattern. The reason why rising miner profits have a constructive effect on the market is because healthy miner finances mean they can’t put any selling pressure on the coin. They can also invest in developing the facility during this period.
If previous patterns in this indicator are anything to go by, then the current break above the metric’s annual average could be a sign that the market has transitioned into a more bullish environment today.
BTC price
At the time of writing, Bitcoin is trading around $28,000, up 14% over the past week.
BTC has rebounded back above $28,000 | Source: BTCUSD on TradingView
Featured images from Dmitry Demidko on Unsplash.com, charts from TradingView.com, Glassnode.com