The Bitcoin Hash Ribbons indicator, which analyzes 30-day and 60-day moving averages to assess mining difficulty and the financial stress on miners, has signaled a possible end to miner capitulation, according to data from CryptoQuant.
When the 30-day moving average crosses above the 60-day moving average, it indicates that miners are likely transitioning to more efficient equipment and re-entering the market. This trend often aligns with price bottoms for Bitcoin, presenting an opportunity for investors to enter the market at more favorable prices by timing their purchases strategically.
Mining Difficulty Hits Record High
On August 1, Bitcoin’s mining difficulty – measuring the computational power needed to mine a single Bitcoin – reached a record high of 90.66 trillion. Although it has since adjusted down slightly to 86.8 trillion, this level remains significantly higher than historical averages.
Bitcoin mining difficulty
This increased difficulty has squeezed miner profit margins, driving the miner hash price, which gauges miner profitability, to historic lows of under $36 per petahash per second (PH/s). While the miner hash price later recovered to around $40 PH/s, it remains precariously close to historic lows.
Read more: 5 Catalysts That Could Spark a Bitcoin Bull Run: Elections, Rate Cuts and Historical Trends
Bitcoin Miners Explore High-Powered Computing Services
Due to shrinking profit margins caused by both rising computational power and reduced block rewards post-halving, some Bitcoin miners are diversifying into high-performance computing and artificial intelligence services.
In July, Bitcoin mining company TeraWulf announced its expansion into high-performance computing and AI data centers. The company is constructing a new facility at its Lake Mariner site, dedicating 2 megawatts of power to support its initial foray into data center services.
Cre: cointelegraph.
I’m Jessi Lee, currently living in Singapore. I am currently working as a trader for AZCoin company, with 5 years of experience in the cryptocurrency market, I hope to bring you useful information and knowledge about virtual currency investment.
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