This is why Bitcoin may see less sales pressure from miners: CryptoQuant

Bitcoin (BTC) may see the pressure of selling less from miners in the near future due to the increase in the profitability of this market participants and the recovery of their hashrate following the cryptocurrency's rally to the $69,000 region.

According to a report by CryptoQuant, Bitcoin network hashrate is back as BTC has had its latest rally. The metric rate is now at an all-time low of 3 percent, down from 8 percent on July 9.

Hashrate of the Bitcoin network recovers

On July 9, Bitcoin's hashrate dropped to its lowest level since February 28. However, at the time of writing, the rate has increased by 6% to 604 EH/s. CryptoQuant analysts say that hashrate's recovery is often linked to bitcoin's ongoing price rally.

The increase in mining comes with an increase in their profitability. This set of market participants was paid more than they were paid after Bitcoin's halving in April. This is evident in the mining/loss sustainability metric, which measures the growth of mining revenues relative to the growth of the mining problem.

The increase in miners' profitability suggests that there may be less pressure to sell BTC as they do not need to unload their holdings to manage operating costs.

Bitcoin's recent rally has seen daily mining revenues increase by nearly 50%. Total daily mining revenues are currently around $32 million, compared to a year-to-date low of $22 million earlier this month. In particular, high revenues encourage the recovery of Bitcoin's hashrate.

Big miners are hoarding BTC.

As profitability and revenues are increasing, the flow of BTC from miners is lower than at the beginning of this year. When BTC rose to $70,000 in early March, daily mining flows hovered between 10,000 and 20,000 BTC, and the figure has remained high since the mid-April dip. However, in July, the outflow fell to 5,000-10,000 BTC.

It is worth mentioning that large Bitcoin mining companies are increasing their holdings while smaller companies are selling. The total balance of large miners currently stands at 65,000 BTC, compared to 61,000 at the beginning of the year, while small miners have dropped from 59,000 BTC to 51,000 BTC in the same period. Small miners unloaded a lot of their bitcoins after the halving event.

CryptoQuant warned that miners could face the risk of remaining in a “stress level” when it comes to payouts because their profitability depends on the price of bitcoin.