On-chain data shows that the Bitcoin Mining Hashrate has been increasing recently, suggesting that miners are expanding their facilities again.

Bitcoin Mining Hashrate Has Recovered From Its Recent Lows

The “Mining Hashrate” refers to an indicator that tracks the computing power that Bitcoin miners currently have connected to the network. It is measured in units of terahashes per second (TH/s).

When the value of the metric goes up, existing miners expand their facilities and new miners join the network. Such a trend implies that miners find the network attractive.

On the other hand, a drop in the indicator indicates that some miners have decided to disconnect from the blockchain, probably because they no longer find mining profitable.

Below is a chart showing the trend in the 7-day moving average (MA) of the Bitcoin mining hashrate over the past year:

The value of the metric appears to have been going up in recent days | Source: Blockchain.com

As shown in the chart above, the 7-day MA Bitcoin Mining Hashrate had dropped to around 610 million TH/s earlier in the month, from a record high of 667 million TH/s in late July. The reason behind this trend is likely the bearish momentum that BTC had experienced during that period.

Miners earn most of their income through the block subsidy, which is issued at a fixed BTC rate and a fixed time interval. Thus, the only variable associated with these rewards is the USD price of the cryptocurrency. The previous decline of the asset had a drastic effect on the miner’s finances.

BTC dropped to a low of less than $50,000 during this crash, but the asset has since staged a remarkable recovery. However, the price is still a long way from the $70,000 level seen late last month.

Interestingly, despite the lackluster recovery, the 7-day MA Mining Hashrate has shown a sharp rebound over the past week, reaching 650 TH/s two days ago. It seems that some miners are betting on a better outcome for the asset soon.

A popular indicator used to track the situation of BTC miners based on the hashrate is the “Hash Ribbons”. The ribbons here refer to the 30-day and 60-day MAs of the hashrate.

When the former crosses the latter, miners are believed to be going through a capitulation phase as they quickly take their computing power offline. Historically, BTC has tended to bottom when miners were in distress.

On-chain analytics firm CryptoQuant discusses the latest trend in this metric in a new post on X.

The data for the Hash Ribbons over the last few years | Source: CryptoQuant on X

The chart shows that the Bitcoin Hash Ribbons previously signaled capitulation, but the 30-day MA has now risen above the 60-day MA again.

“While the indicator is not intended to indicate the exact bottom of the price, it often precedes higher prices by signaling a decrease in selling pressure from miners,” CryptoQuant explains.

BTC price

At the time of writing, Bitcoin price is trading at around $58,800, down 4% over the past week.

Looks like the price of the asset has been moving sideways over the last few days | Source: BTCUSD on TradingView

Main image from Dall-E, CryptoQuant.com, chart from TradingView.com