Author: Matt Crosby, Bitcoin Magazine; Translation: Deng Tong, Golden Finance

Bitcoin miners have always been a reliable indicator of the overall market sentiment. By tracking their income and actions, we can understand the next steps in BTC price. In this article, we will explore the latest trends in Bitcoin mining, how miners are responding to the current market conditions, and what information we can glean from key indicators to assess how Bitcoin miners are preparing for the coming weeks and months.

Miner Income Status

One of the best ways to assess Bitcoin miners' sentiment is to examine their income based on historical data. This can be achieved using the Puell Multiple, which compares the current miners' income to the previous year's annual average income.

As of the latest data, the Puell Multiple hovers around 0.8, meaning miners' income is 80% of the past year's average income. This is a significant improvement compared to a few weeks ago when the multiple dropped to 0.53, indicating miners' income was just over half of the previous year's average income.

Figure 1: Miner income has declined compared to historical average levels

The significant drop earlier this year may have brought financial pressure to many miners. However, despite facing these challenges, the fact that the Puell Multiple is recovering suggests that miners' prospects may be improving.

Hash rate and network growth

Despite declining profits, there is no sign that miners will leave the network. In fact, the hash rate of Bitcoin (the total computing power used to protect the network) has been steadily increasing. The sharp increase in hash rate indicates that more miners are entering the network, or existing miners are upgrading their equipment to compete for block rewards.

Figure 2: Hash rate continues to climb to a historical high

However, looking at the Hash Ribbon indicator tracking the 30-day (blue line) and 60-day (purple line) moving average of the Bitcoin hash rate, these two averages are close to crossing, which may signal a bearish outlook in the short term. Historically, when the 60-day average is higher than the 30-day average, it indicates that miners are selling off, meaning miners are shutting down equipment under financial pressure.

Figure 3: Hash Ribbons may be on the edge of a bearish crossover

No bearish signs immediately appear before we see a bearish crossover. A positive aspect is that each time this happens, there is usually an accumulation period, which typically precedes a rise in the price of Bitcoin. Investors often see these selling periods as good opportunities to buy BTC at lower prices.

How much money can miners earn?

Although we have discussed the relationship between miners' income and the price of bitcoin, another important factor is the hash price, which is the amount of BTC or USD that miners can earn for each terahash (TH/s) of computing power contributed to the network.

Fig. 4: The hash price indicates that even though rewards decrease after halving, competition for block rewards intensifies.

Currently, miners can earn about 0.73 bitcoins, or approximately $45,000, per terahash. In the months following the recent bitcoin halving event, this number has been steadily decreasing, with miners' block rewards reduced by half, thereby reducing their profitability. Despite these challenges, miners continue to increase their hash rate, indicating their bet on a future increase in bitcoin price to compensate for their lower income.

One of the most significant indicators is the hash price volatility, which tracks the change in miners' income over time. Historically, periods of low hash price volatility often precede significant fluctuations in bitcoin price. As of the latest data, hash price volatility has started to decline again, indicating that we may be approaching a period of significant bitcoin price fluctuations.

Fig. 5: The hash price volatility is at a very low level, outlining the possibility of sustained fluctuation trends in the near future.

Conclusion

Compared with the historical average level after the halving, bitcoin miners' income has decreased, but they are recovering from the recent significant low point. Bitcoin's hash rate is still rising; this means that despite the decrease in profitability, miners are still putting more computing power into the network. The hash price continues to decline, but miners remain optimistic, possibly because they expect future prices to rise. The volatility of hash price is decreasing, historically indicating that the price of BTC may experience significant fluctuations soon.

Despite the current challenges, bitcoin miners seem to be optimistic about the long-term potential of BTC. If the current trend of indicators remains unchanged, we may soon experience significant price changes, with most signs pointing to a positive outlook.