Bitcoin on-chain activity had been lit up like a Christmas tree in the weeks leading up to the Ethereum merger. Even though the upgrade didn’t happen on the Bitcoin network, it was still significant to the crypto space, leading to increased activity across different networks. However, after the merge is complete and dusted off, network activity has started to return to “normal” levels, resulting in a drop in on-chain activity.
Bitcoin mining hash rate drops
Bitcoin mining difficulty had adjusted downward for the first time in two months. Because of this 2.1% difficulty adjustment down, the block production rate remained low at 5.94 blocks produced per hour. It coincided with Bitcoin hash rate hitting a new all-time high before recording a reversal.
Nonetheless, the difficult adjustment is good news for bitcoin miners, who have seen their earnings plummet over the past week. The average transaction per block fell 1.55% from 1,786 to 1,759 in 7 days.
BTC hash rate pulls back from all-time high | Source: Arcane Research
Bitcoin mining hash rate has now returned to early September levels, showing a retracement back to pre-merger levels. But this hash rate remains on the high side as well, showing increasing conviction among bitcoin miners during this time.
Revenue takes a hit
Bitcoin miners are still feeling the heat since the bear market refused to hit. Miners’ daily earnings are now at one of their lowest points in the last year, with just over $17 million in daily earnings. This represented a decline of 4.04% over a 7-day period.
Realized fees per day followed the same downtrend, falling 19.49% to $254,199. This reduced the fee share by a further 0.28% to 1.48% of all fee income.
BTC price trend at previous highs | Source: BTCUSD on TradingView.com
However, the biggest declines over the past week have been in average transaction values and daily transaction volumes. The former had suffered a 37.61% drop over the past week, bringing the average transaction value to $12,304. At the same time, daily transaction volume fell by 38.57% from $5.023 billion to $3.085 billion. This was the largest drop recorded in the last week. Transactions per day also fell from $254,696 to $250,755, down 1.55%.
Bitcoin price has also followed this trend and struggled in the market. It was unable to reclaim $20,000 and is now trading firmly at the peak of the previous cycle. Understandably, this has turned into a key support level for the bulls.
Featured image by Bitcoinist, charts by Arcane Research and TradingView.com
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