• 28 May, 2024
Market News

Bitcoin Hashrate Decline: Analyzing the Post-Halving Impact

Renowned analytical platform IntoTheBlock has recently highlighted the early effects of Bitcoin’s halving on miner revenues, noting a noticeable drop in the hashrate. The analyst reveals in a recent X post that the declining revenues’ initial impact on miners was just 30 days after the halving event.

According to a recent report, Bitcoin’s hashrate, a measure of the network’s computational power, has experienced a dip. Previously, the 30-day moving average of the hashrate peaked at 630 exahashes per second (EH/s). Currently, it stands at 606 EH/s. Although this decline is modest and brief, it is significant given the historical trend of the hashrate typically rising post-halving. This shift marks a departure from the usual pattern, indicating the halving’s impact on the mining ecosystem.

Periods of rapid declines in the hashrate, marked in green on the Bitcoin price chart, often signal “miner capitulation.” This term refers to less efficient miners shutting down their operations due to reduced profitability. These miners may also relocate to more favorable regions or sell recently mined Bitcoin to cover their operational costs.

Source: Image by IntoTheBlock

The Hash Ribbons indicator operates on the premise that miner capitulation often coincides with significant price lows for Bitcoin. This creates a potential buying opportunity for investors looking to capitalize on price dips. However, this opportunity does not materialize immediately after the initial capitulation signal. Instead, it unfolds over subsequent days and weeks as less efficient miners exit the market.

IntoTheBlock’s analysis is a proof of the fact that the hashrate trends and the miner behaviour should be closely monitored after the Bitcoin’s halving. The hashrate is variable, investors and experts are all watching for the signs of the next miner capitulation and the potential price movements. The changing relations of the Bitcoin network after the halving will be the main source of the essential knowledge of the future movement of the cryptocurrency market.

The recent drop in the Bitcoin’s hashrate is the preliminary indication of the halving effect on the miner revenues and the whole network. The decrease of the less efficient miners is the sign that the market will probably see the significant price lows which would be the buying opportunity for the smart investors. The next few weeks would be the key in the decision of the long-term effect of the halving on the price and the network stability of Bitcoin.

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