Bitcoin miners are accelerating their operations as the network hashrate reaches an all-time high, signaling a potential price bottom for the cryptocurrency, according to a report shared by blockchain analysis firm CryptoQuant.
This week, the Bitcoin network hashrate reached 627 Exahashes per second, recovering from the 8.5% drop observed in early July.
The increase in mining capacity came despite the recent decline in Bitcoin (BTC) prices and a record low hash rate, which reflects the average revenue generated per unit of mining power.
This shows a positive sentiment among miners after a significant sell-off.
Hashrate measures the computing power used by miners to produce new Bitcoins and verify transactions on the network.
Despite the current low prices and mining revenues, the increase in hashrate suggests that miners are likely expanding their capacity in anticipation of future price increases.
Last week, CryptoQuant reported a “miner crash event” marked by a sudden spike in miner outflows. On August 5, daily miner outflows rose to 19,000 BTC, the highest level since March 18.
Such crash events are often observed near local price bottoms during the market's bullish phases.
Miners, who provide computing power to the network in exchange for BTC rewards, are selling Bitcoin to stay profitable. In early July, when BTC prices were hovering around $54,000, only five popular mining platforms were profitable.
The report noted that miners sold some Bitcoin as their average operating profit margin fell to 25%, the lowest level since Jan. 22.
Historically, spikes in miner outflows have coincided with local price bottoms, such as in March 2023 following the Silicon Valley Bank sale and in January 2024 following the launch of Bitcoin spot ETFs in the US.
*This is not investment advice.