Bitcoin’s price has largely remained range-bound between $9,000 and $10,000 over the past two months leaving commentators and investors to wonder what will come next.
After Bitcoin’s historic mining difficulty increase on Tuesday, June 16, most expected for less efficient miners to shut down operations and cause Bitcoin’s hash rate to plummet. However, data from BTC.com shows that since Tuesday, June 11 the hash rate has increased from 101 million TH/s to 105 million TH/s, suggesting that miners have managed to stay afloat.
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The network’s GNI — an index tracked by Glassnode monitoring the overall state of the network — decreased by only one point over last week. The GNI is composed by factoring in 19 metrics ranging across liquidity, sentiment, and network health. Glassnode analysts believe that network metrics can help to predict Bitcoin’s price and demonstrated in a recent report that historically a high GNI value coincided with bullish periods for Bitcoin.
A network’s GNI value lies between 0 and 100 with Bitcoin’s usually hovering close to 50. Over the past week, Bitcoin’s GNI value decreased from 58 to 57 indicating that regardless of the one point drop the network is in a strong position.
The one point drop came from the investor sentiment subcategory of the GNI score dropping down to 42 points. Last week marked the second week in a row that investor sentiment has declined. Network growth and activity both declined last week, which could be a reflection of depleted confidence of investors.
While last week’s metrics are slightly discouraging, mining equipment supplier Canaan said post-halving that it is receiving an increasing number of requests for equipment. This suggests that despite the recent halving and the spike in difficulty, miners are still looking to expand operations. Data from Bytetree shows that over the past week miners have generated more Bitcoin than they have sold meaning operations still appear to be profitable.
If Bitcoin’s price continues to sustain miners’ profitability and the hash rate remains high, this could paint a bullish picture for the future of Bitcoin. However, if investor sentiment doesn’t hold up to support miner operations things could swing the other way.
By Emily Mason