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Bitcoin has recently been able to successfully set new ATHs, with price corrections being met by quick bouncebacks. BTC fell below $55k in the last seven days before restoring most of its losses to trade about $58k at press time, not far from its present ATH.
Although Bitcoin’s recent price exploits have been notable, it is also important to understand how a core demographic within the BTC community has responded to this price spike.
Miners support the coin and conceal the weakest ties. This is also the case of Bitcoin. Though market trust and a rising price are important aspects of the coin, weak network protection will reverse all of the previous decade’s efforts. As a consequence, Bitcoin’s miner network is an incredibly critical aspect of the coin’s long-term prospects.
Surprisingly, many small/medium-sized mining activities were put at risk last year when the coin’s third block incentive was halved. However, the story seems to have shifted dramatically since then. Miners have sought respite as rates have increased. It was announced a day ago that miners were earning record-breaking amounts from both block incentives and transaction fees. In reality, per-day revenue for Bitcoin miners peaked at $63 million on March 15.
Furthermore, a new Glassnode article highlighted two interesting trends involving Bitcoin miners. The first was the increased income miners are now earning, and the second was the spike in transaction costs.
While the halving in 2020 raised concerns about the viability of small and medium-sized mining activities, the price cut in 2021 seems to have came as a relief. However, BTC has seen an increase in transaction fees, with network statistics indicating that global transaction fees connected to exchanges account for about 30% of on-chain transaction fees.
Although miners are no longer on the verge of insolvency, it is also worth investigating what miners are doing with their profits and whether or not they are hoarding Bitcoins. Strong hodling sentiments among coin miners have always been a significant predictor of whether the coin is facing a sell-off and how the price will respond in the short term.
According to Glassnode info, miners’ trade flow (7d MA) reached a 1-month low of 10.684 BTC. This meant that miners aren’t selling their profits, and that they have a lot of money, which makes their activities lucrative and adds to the overall stability of the network.
With Bitcoin continuing to trade in the $60k-price range, miners backing the cryptocurrency could be the decisive factor that propels the coin past its most recent ATH. Furthermore, BTC has seen a large uptick in funding from conventional and institutional investors in recent months, and high miner trust means that the network’s weakest ties in terms of stability are shielded and safe.