- The hype of Bitcoin ordinal numbers is cooling, resulting in a slowdown in miner earnings.
- Assessing the potential for a BTC rally as miner reserves rise.
The Bitcoin community had mixed feelings about the recently introduced BRC-20 token standard. Unfortunately, those who opposed it couldn’t do much and Bitcoin miners are extremely happy about it.
The BRC-20 tokens unlocked a lot of network activity, which in turn led to a surge in Bitcoin miner revenue. The excitement that previously surrounded the BRC-20 token standard, especially Bitcoin’s ordinal inscriptions, has since died down.
As a result, Bitcoin miner revenues have shrunk in recent days. Miner revenue peaked at $17.8 million at the height of the BRC20 hype.
At the height of the BRC-20 frenzy, #Bitcoin Miners earned $17.8 million in transaction fees, with just 2 trading days during the 2018 peak recording higher fee income.
Currently, miners earn $1.7 million in fee income, down -$16.1 million from the recent peak. However, this… pic.twitter.com/T5pJpeoxxk
— glassnode (@glassnode) May 29, 2023
The recent surge in Bitcoin miner earnings represented the largest spike seen in the past three years. The last time miners’ earnings were this high was during the recent peak in May 2020.
Source: Glassnode
Higher miner income tends to encourage more miner participation as there is more income to distribute. As such, the higher profitability tends to attract more miners and this has been the case for the past four weeks.
Unsurprisingly, Bitcoin’s hash rate has generally increased so far this year. It also rose to the highest historical level in early May.
Source: Glassnode
The overall increase in Bitcoin’s hash rate reflected the slight market recovery seen since the start of the year.
Do miners contribute to selling pressure?
Considering Bitcoin miners’ reserves is one of the best metrics to judge overall market sentiment. A fall in miner reserves indicated low confidence in the market. On the other hand, an increase in mining reserves indicated that there was some market confidence.
The miner reserve metric has been on an overall downward trend for the past five months. However, at the time of writing, it just registered its biggest spike in the past 24 hours. This means that the miners’ confidence was recovering.
Source: CryptoQuant
Bitcoin miners’ new-found confidence comes at a critical time in Bitcoin’s price performance. BTC has been in the ranging market for a little over two weeks, but has recently entered a bullish breakout. Interestingly, this breakout came right after the end of the BRC-20 and Bitcoin ordinals hype.
How much are 1,10,100 BTC worth today
Will Bitcoin Perform Bullishly in June? Well, it’s still too early to call, especially since whale activity has yet to match Bitcoin miner reserves. However, bullish miner reserve spikes and volatile directional moves can be expected now that the price is moving out of a low volume range.