- Bitcoin ordinals hype cools off resulting in a miner revenue slowdown.
- Assessing the potential for a BTC rally as miner reserves surge.
The Bitcoin community had mixed feelings about the recently introduced BRC-20 token standard. Unfortunately, those opposed to it could not do much and Bitcoin miners are particularly 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 ordinal inscriptions has since died down.
Bitcoin miner revenue shrunk in the last few days as a consequence. Miner revenue peaked at $17.8 million at the height of the BRC20 hype.
At the peak of the BRC-20 frenzy, #Bitcoin Miners were earning $17.8M in transaction fees, with only 2 trading days across the 2018 peak recording a larger fee revenue.
Currently, Miners are earning $1.7M in fee revenue, a -$16.1M decline from the recent peak. However, this… pic.twitter.com/T5pJpeoxxk
— glassnode (@glassnode) May 29, 2023
The recent surge in Bitcoin miner revenue represented the largest spike observed in the last three years. The last time that miner revenue was that high was during the recent peak in May 2020.
Source: Glassnode
Higher miner revenue tends to encourage more miner participation since there is more revenue to be shared out. As such, the higher profitability tends to attract more miners and this has been the case in the last four weeks.
Unsurprisingly, Bitcoin’s hash rate has been on an overall uptick so far this year. It also soared to the highest historic level at the start of May.
Source: Glassnode
The overall surge in Bitcoin’s hash rate reflected the slight market recovery observed on a year-to-date basis.
Are miners contributing to selling pressure?
Taking Bitcoin miner reserves into consideration is one of the best metrics for assessing the overall market sentiment. A drop in miner reserves indicated low confidence in the market. On the other hand, a surge in miner reserves indicated that there was slight market confidence.
The miner reserve metric has been on an overall downtrend for the last five months. However, it just registered its largest spike in the last 24 hours at the time of writing. This means that miner confidence was recovering.
Source: CryptoQuant
The new-found Bitcoin miner confidence comes at a critical time in Bitcoin’s price performance. BTC has been tuck in the ranging market for a little over two weeks but it recently embarked on a bullish breakout. Interestingly, this breakout came right after the conclusion of the BRC-20 and Bitcoin ordinals hype.
How many are 1,10,100 BTCs worth today
Will Bitcoin deliver a bullish performance in June? Well, it is still too early to call especially since whale activity does not match Bitcoin miner reserves yet. However, a bullish miner reserves spike and volatile directional movements could be expected now that the price was moving out of a low volume range.
