Bitcoin price revisited the $60,000 mark as Mt. Gox’s announced that it would begin distributing $9 billion in repayments. Recent ETF outflows have not helped, but the low exchange reserves offer some hope. With the start of summer, hashrate is beginning to show seasonal behavior. Transaction fees have returned to normal. Bitcoin price action is pushing hashprice towards record lows, making it a nail-biting period for miners. In today’s mining economics rundown, we will cover the following topics.
Bitcoin Price Revisiting $60,000
Two Weeks of Outflows Bitcoin ETFs
Record Low Exchange Reserve Gives Hope
Hashrate Seasonality
Difficulty Adjustments Flatting
Transaction Fees Back at Lower Levels
Hashprice Nearing Historic Lows
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Hashprice Record Lows Post 2020 Halving
Hashrate Forward Curve
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Bitcoin Price Revisiting $60,000
Bitcoin’s price experienced a significant drop on Monday, falling over 5% in daily trading. This decline followed Mt. Gox’s announcement that it would begin distributing $9 billion in Bitcoin and Bitcoin Cash repayments starting in early July. Bitcoin revisited its recent low range, briefly falling below $60,000. Bulls are eager for this level to hold as support. The 50-day moving average (blue line) was breached several days ago, and the 200-day moving average (green line) is rapidly rising below, currently around $58,000. Bitcoin’s price hasn’t fallen below the 200-day moving average since it was at $28,000.
Two Weeks of Outflows Bitcoin ETFs
After a five week streak of inflows, the Bitcoin ETFs saw two weeks of outflows with a total of just under 8.5K BTC outflows last week and 8.7K BTC the week before.
Record Low Exchange Reserve Gives Hope
In the past two weeks, not only have ETF outflows put pressure on Bitcoin, but large holders (whales) have also sold an astounding $1.2 billion worth of BTC. Some of these sellers included Bitcoin miners, who are under increased pressure to sell their holdings to compensate for reduced revenues post-halving.
Exchange Reserve refers to the overall quantity of Bitcoin stored in the wallets or addresses controlled by exchanges. According to CryptoQuant data, the exchange reserve reached a three-year low. This suggests reduced selling pressure ahead, indicating that Bitcoin investors are moving back into accumulation mode after significant profit-taking.
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Hashrate Seasonality
The network hashrate 7-Day Moving Average (DMA) has been declining over the last week. Currently hashrate is 13.8% from its all-time high. When zooming out, hashrate is still ranging, as it has for most of this year.
The 30-Day Moving Average (DMA) for network hashrate is declining after being stagnant for about two months. With the summer officially started, it is likely that network hashrate will not grow much in the coming months, especially if heat waves occur in major mining states such as Texas. Many miners must reduce operations during the summer months to prevent ASIC hardware from overheating and because residential energy consumption reaches high levels due to air conditioning use. This increased demand puts pressure on the electrical grid and activates demand response clauses in power purchase agreements for miners such as Riot Platforms.
Difficulty Adjustments Flatting
Last week, there was a slight downward difficulty adjustment of -0.05%. As the network hashrate continues to range, the network difficulty is flattening out.
Transaction Fees Back at Lower Levels
After a brief surge where transaction fees surpassed the block subsidy, transaction fees as a percentage of the total block rewards have returned to low levels again.
Hashprice Nearing Historic Lows
The bearish BTC price action and lack of transaction fees have pushed the hashprice toward the lowest level in history. The margins for miners are almost as tight as they were shortly after the halving. Another 6.3% decline, and the hashprice will set a new record low.
And now we move on to the next content for our Premium Members:
Hashprice Record Lows Post 2020 Halving
Hashrate Forward Curve
