Bitcoin’s on-chain activity had been lit up like a Christmas tree in the weeks leading up to the Ethereum meltdown. Even though the upgrade was not taking place on the bitcoin network, it was still significant for the crypto space, leading to increased activity on various networks. However, now that the merge has been done and dusted off, network activity has started to return to “normal” levels, leading to a drop in on-chain activity.
Bitcoin Mining Hashrate Drops
For the first time in two months, the difficulty of bitcoin mining has adjusted lower. Due to this downward difficulty adjustment of 2.1%, the block production rate remained low at 5.94 blocks produced per hour. This coincided with bitcoin’s hash rate hitting a new all-time high before a reversal was recorded.
Nevertheless, the difficult adjustment is good news for bitcoin miners who saw their income plummet last week. The average transaction per block fell by 1.55% over a 7-day period, from 1,786 to 1,759.
BTC hash rate retraces from all-time high | Source: Arcane Research
Bitcoin’s mining hash rate has now returned to early September levels, showing a retracement towards pre-merger levels. But this hash rate remains high even during this period, showing increased conviction of bitcoin miners during this period.
Revenue suffers
Bitcoin miners are still feeling the heat since the bear market refused to hit. Daily miner earnings have now hit one of their lowest points of the past year, at just over $17 million in daily earnings. This represents a decline of 4.04% over a 7-day period.
Fee earned per day followed the same downward trend and fell 19.49% to $254,199. This reduced the percentage of royalty revenue by another 0.28% to 1.48% of all royalty revenue.
BTC price trending at previous peak highs | Source: BTCUSD on TradingView.com
However, the biggest declines over the past week have been in average trade values and daily trading volumes. The former was down 37.61% last week, bringing the average trade value to $12,304. Meanwhile, daily trading volumes fell 38.57% from $5.023 billion to $3.085 billion. This is the largest decline recorded in the past week. Transactions per day also decreased from $254,696 to $250,755, a decrease of 1.55%.
Bitcoin price also followed this trend and struggled in the market. It had been unable to recover $20,000, now trading firmly at the top of the previous cycle. Naturally, this turned into a major support level for the bulls.
Featured image from Bitcoinist, charts from Arcane Research and TradingView.com
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