CryptoQuant links Bitcoin mining hashrate nearing all-time high levels to potential price stability

The Bitcoin mining hashrate is nearing all-time highs, which CryptoQuant analysts believe could help with the cryptocurrency’s price stability.

Bitcoin miner hashrate is making a comeback as the digital asset’s price recovered on Monday to over $69,000, before experiencing a recent correction to around $66,000. The hashrate has recovered since July 9, which CryptoQuant analysts have linked to sustained price levels.

"Hashrate drawdown from all-time-highs is now only at 3% compared with 8% on July 9, and hashrate recovery is typically associated with a sustained rally of bitcoin prices," CryptoQuant analysts said.

The bitcoin mining hashrate drawdown from all-time highs is now narrowing to within 3% of the peak. Image: CryptoQuant.

Wednesday's CryptoQuant market report said that miners have increased hashrate as they are now being fairly paid after the price rally at the beginning of the week. "This contrasts with miners being extremely underpaid basically since April, after the bitcoin halving occurred, and as miners are fairly paid there could be less bitcoin selling pressure from them," the report added.

The Block's Data Dashboard shows mining hashrate hit an all-time high on Monday, when the bitcoin price increased above the $69,000 mark. The Block's data shows the current hashrate is 636 EH/s, a slight dip from Monday's reading of 667 EH/s.

The CryptoQuant analysts also noted that bitcoin transferred out of miner wallets has cooled down, and large miners are accumulating bitcoin. "Daily bitcoin miner outflows have remained between around 5,000 BTC and 10,000 BTC in July, compared to 10,000 BTC and 20,000 BTC in early March, when Bitcoin first touched $70,000, and lower than the spikes seen in April-May, after the bitcoin halving," CryptoQuant analysts said.

Additionally, the report found that the total bitcoin balance of large miners currently stands at 65,000 bitcoin, compared with 61,000 bitcoin at the start of 2024. "However, smaller miners have reduced their holdings from 59,000 BTC to 51,000 BTC so far in 2024," the report added.

Bitcoin miner revenues are increasing

According to CryptoQuant analysts, the bitcoin price increase over the last few weeks has caused total daily miner revenues to increase by almost 50%. "Daily miner revenues are currently around $32 million, compared to a year-to-date low of $22 million reached in early July, and these higher revenues are supporting the comeback of network hashrate," they added.

Bitcoin price rises have seen daily miner revenue increase by almost 50%. Image: CryptoQuant.

The CryptoQuant report did identify one risk for miners: fees remain at depressed levels. "Miner profitability is currently too much dependent on the price of bitcoin, as daily total transaction fees have plummeted to eight bitcoin, significantly lower than before the halving, when fees totaled around 150 bitcoin," CryptoQuant analysts said.

According to The Block's Data Dashboard, the seven-day moving average of transaction fees on the bitcoin network has dropped from around $2.14 at the beginning of July to a current reading of $1.11. 

Bitcoin is currently trading at $65,964, down around 1% in the past 24 hours, according to The Block’s price page. Bitcoin’s market dominance stands at 53%, according to The Block's data dashboard. The global cryptocurrency market cap has decreased by around 0.7% in the past day, and now stands at $2.49 trillion.