Bitcoin Miners Speed Up Block Generation to Highest Since Sept. 2017
After starting the month above $10,000, Bitcoin is currently trading around $9,700 with a low “real” volume of under $2 billion.
Trading in a narrow range of $9,450 to $9,900, any upticks in price are soon stripped down. Over the weekend, a record 53 million ERC20 USDT tokens were moved to the centralized exchanges. This biggest inflow of Tether in a month came before BTC’s decline.
As such, large moves are seen to “often correlate with major upcoming volatility,” as per Santiment.
Potential Short Term Sell-off
While large amounts of USDT are making their way onto cryptocurrency exchanges, the Bitcoin supply held on these exchanges has dropped to its lowest level in a year.
BTC balance on exchanges is currently at 2,310,466 BTC, breaking the previous 1-year low of 2,313,098 BTC on June 3rd, 2020.
Just like investors are holding Bitcoin, miners have taken to HODL after the halving. According to Glassnode data, since halving, they have been holding their BTC which “may not necessarily represent bullish sentiment, but rather an inability to recover costs at current prices.”
This could also mean that the next spike in price could trigger a short-term sell-off in bitcoin.
Moreover, inefficient miners are still selling their BTC, as per miner's rolling inventory. Currently, at 105.4%, an MRI above 100% means miners are selling more BTC than they are generating.
Miners over 100 blocks ahead of schedule
Last month, bitcoin reward halving cut down the miner reward in half which reduced the supply flowing into the market. Amidst this supply shock, Grayscale has been consuming about 50% more BTC than has been mined during this period.
While institutional investors are getting interested in bitcoin, the network fundamentals are back to surging that took a hit following the halving.
Hash rate of the network which dropped over 40% has now climbed to 133.79 Th/s near its all-time highs of 136.2 Th/s on March 1st.
This increase in hash rate is the result of the 9.29% downwards adjustment in difficulty last week and the ongoing rainy season in China, that will last by the end of October, pushing the “all-in hosting” price down to $0.03/kWh from $.055/kWh.
This also means the time to find new blocks that went up more than 14 minutes post halving crashed to 7.3 minutes this weekend. Currently, it is 9 minutes, as per Bitinfocharts.
The drop from the 10 minutes target put us over 100 blocks ahead of schedule. On June 2nd, 129 new blocks were mined that went up to 196 blocks on June 6. Last time, 197 blocks were mined, was in early September 2017.
History rhymes or retail is right this time
When it comes to price, “we had the false breakout at 10.4k, next pop back up to 10k and trap bulls again, then dump to bottom of the range at 8.7k, then continue macro uptrend to financial freedom,” is market analyst Benjamin Blunts’s BTC gameplan.
On regulated platform CME Group, large speculators laid on the same net exposure to the short side between $8.5k and $10.5k as earlier in the year. Nonreportable (retail) is very long and only marginally down from ATH two weeks prior.
This means the position is the same as the last time we were at $10,000 but overall more retail long positions. Moreover, 50/100 DMA cross is coming just like the last time but with 50/200 golden cross also due to occur.
“History rhymes or retail is right this time?” concluded analyst FilbFilb.