- After a dip, BTC’s hashrate gained upward momentum and recovered.
- BTC was down by over 2% in the last seven days while selling pressure increased.
Bitcoin [BTC] witnessed a sharp drop in a key mining metric that suggested a decline in the industry. Not only that, but miners seemed to have been selling their assets.
Does this mean that they have lost faith in BTC while it awaits its upcoming halving in 2024?
Is Bitcoin’s mining industry declining?
As we are entering the new year, Bitcoin witnessed a massive drop in its key mining metric. To be precise, BTC’s hashrate sank sharply on the 29th of December. A drop in the metric generally means an outflow of miners from the ecosystem.
Apart from that, another key metric that sank in the recent past is BTC’s miners’ balance, as evident from Glassnode’s data.
Source: Glassnode
At first glance, this might look disastrous for Bitcoin, as it is expecting its next halving in just a few months. However, upon closer inspection, a different story was revealed.
James Van Straten recently posted a tweet highlighting the aforementioned data.
But he also revealed that the drop in miners’ balance did not mean that the miners were selling their assets. This was the case, as there were barely any Bitcoins sent to exchanges, meaning that the episode happened because of wallet re-shuffling.
Slightly concerned about the declining hash rate and #Bitcoin miner balance, which is dropping quite extensively.
The mining pools that are reducing the balance are MaraPool, F2Pool, and Poolin, by about 13k BTC in the past few weeks.
This doesn't mean they have sold; in… pic.twitter.com/Pq6iIt2teD
— James Van Straten (@jimmyvs24) December 29, 2023
In fact, upon further digging, AMBCrypto found that after the massive drop on the 29th of December, the blockchain’s hashrate climbed up pretty quickly as it recovered.
As per Coinwarz, at the time of writing, BTC had a hashrate of 695.09 EH.
Source: Coinwarz
Since the metric was recovered, AMBCrypto double-checked other datasets to understand how miners are behaving.
As per our analysis of CryptoQuant’s data, Bitcoin’s Miners’ Position Index (MPI) was yellow, meaning that miners were selling holdings in a moderate range compared to its one-year average.
Additionally, its Puell Multiple was also in the same position, which meant that miners’ revenue was in a moderate range compared to its one-year average.
Source: CryptoQuant
How BTC might end 2023
While BTC’s mining industry recovered, its price action turned bullish. As per CoinMarketCap, Bitcoin was down by more than 2% in the last seven days.
At the time of writing, it was trading at $42,456.46 with a market capitalization of over $831 billion.
Read Bitcoin’s [BTC] Price Prediction 2023-24
A reason behind the price downtrend could be the hike in selling pressure, and BTC’s exchange net deposit on exchanges was high compared to the last seven-day average.
Nonetheless, long-term holders had immense faith in BTC, as its Binary CDD was green. This meant that the long-term holders’ movement in the last seven days was lower than average.
Source: CryptoQuant
