Bitcoin miners‘ (BTC) revenues fell to early 2019 levels for the second time in 2020. Each time it fell to a multi-year low, it marked the beginning of an upward trend for BTC.
The last time the daily earnings of Bitcoin miners hovered around USD 7 million was on March 13, 2020. At that time, the BTC price fell to just USD 3,600 on BitMEX after a cascade of more than USD 1 billion in long contracts.
After mining revenues fell on March 13, Bitcoin’s price rose from $3,600 to over $10,000 with a 177% gain over the next month and a half.
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Bitcoin miners revenue drop to early 2019 levels
Bitcoin miners‘ revenues fall to early 2019 levels. Source: Blockchain
Bitcoin may show a similar trend in the coming months
When Bitcoin’s mining revenues fall sharply, it indicates that over-leveraged miners are capitalizing due to unfavorable market conditions.
From March 12 to 13, mining revenues declined as a result of a 50% drop in the Bitcoin price within 24 hours. This time, the drop is apparently caused by the effect of Bitcoin’s halving on the mining ecosystem.
Before the halving, miners generated about 1,800 BTC per day in revenues. Today, miners are expected to generate about 900 BTC per day.
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But the price of Bitcoin is currently at a similar level to what it was before halving occurred. For small or over-leveraged miners, the stagnation in the Bitcoin price after halving is enough to cause a temporary halt in their operations.
Typically, this marks a minimum level or bottom for Bitcoin because it indicates a maximum level of fear in the market. Some unprofitable miners are ceasing operations while BTC is stagnant. Therefore, Bitcoin could show short-term volatility as the chain data suggests the minimum generation level before a new upward cycle is apparently established.