On-chain data shows that Bitcoin's hash rate has recently faced setbacks, which may indicate that miners may not believe the asset's run will continue.
The Bitcoin mining hash rate has decreased since its historical high.
The 'hash rate' refers to the metric that tracks the total computational power of miners currently connected to the Bitcoin network. The value of this metric is measured in hashes per second (H/s) or, more practically, in terahashes per second (TH/s).
When the value of this metric increases, it indicates that new miners are joining the network, while old miners are expanding their mining operations. Such a trend suggests that the blockchain presents a profitable opportunity for these chain validators.
On the other hand, a declining metric indicates that some miners have decided to disconnect their rigs from the network, possibly because they can no longer break even.
Now, here is a chart showing the 7-day average trend of Bitcoin Mining hash rate over the past year:
As shown in the graph above, the 7-day average Bitcoin hash rate previously surged sharply and set a new record. However, since reaching a peak of around 755 million TH/s earlier this month, the metric has declined.
The early upward trend of this metric is due to the positive price movement that the asset has consistently enjoyed, as prices are directly related to miners' income.
These chain validators have two ways to earn income: transaction fees and block subsidies. The former depends on traffic conditions and can vary significantly on a daily basis. On the other hand, the latter has very specific constraints.
Block subsidies keep the value of BTC fixed for about four years, with the last event known as halving cutting it in half. These rewards are also distributed at a more or less constant rate, meaning that miners' daily block subsidy income, measured in BTC, remains fairly predictable.
However, there is one variable that can change freely, which is the dollar value of these rewards. Whenever the price rises, miners' block subsidy income also increases. This is why hash rate tends to see growth during bullish periods.
Bitcoin has recently been exploring new highs, but interestingly, the hash rate has remained sluggish. The metric is about 723 million, indicating a decline of over 4% since its peak. This trend may suggest that miners expect obstacles to the current rebound.
BTC Price
At the time of writing, Bitcoin's floating price is around $91,900, having risen over 8% in the past 7 days.
