While Bitcoin is struggling to stay above the $50,000 price level, its fundamentals are presenting a different picture. Hashrate, a leading indicator of the overall health of the Bitcoin network, has seen a strong recovery in the past six months.
From the lows of May 2021, the BTC hashrate has recovered by over 93%. The number reached 172 Exahash/s today, in short distance of the all-time high of 180 Exahash/s. “Bitcoin hashrate has almost completely recovered, sitting only 4% below the ATH (7-day moving average basis). Network hashrate fell by over 50% in May following China's ban on BTC mining. Hashrate has since climbed by 93% from the lows, hitting 172 Exahash/s today,” Glassnode noted.
Earlier this year, China announced a complete ban on crypto mining. Several leading crypto mining companies migrated from the country to other regions, including Europe and North America. Due to the largest migration in the mining industry of digital assets, the hashrate of Bitcoin dropped dramatically.
But, things are getting back to normal now. With rising hashrate, the overall profitability of leading BTC miners has increased as well.
Bitcoin Exchange Inflows
Since May 2021, Bitcoin supply on leading digital exchanges has declined. Long-term holders of the world’s most dominant crypto asset are now holding BTC in cold digital wallets. “During the capitulation in May, exchanges saw a notable and sustained uptick of BTC inflows, with periods of 10.4k and 13.9k net BTC deposits. This contrasts with the present moment, where recent peak exchange inflows are a fraction of the size, at 2k and 3.2k BTC,” Glassnode mentioned.
“Bitcoin holders aren't behaving as they have in prior moments of weakness, hinting at an underlying confidence, and largely confirming weakness was more heavily influenced by derivative markets rather than spot selling,” the company added in its weekly report.
