- Fees generated on the Bitcoin network rose and miners began to see profits.
- Selling pressure on miners declined while MVRV ratio for holders continued to surge.
Despite Bitcoin [BTC] experiencing a rally over the past few months, the state of miners continued to be volatile. However, the situation of miners could change soon. Due to the introduction of Ordinals and Inscriptions, the activity on the Bitcoin network has surged, resulting in a spike in fees collected on the network.
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Hopeful updates for miners
As per the information provided by Token Terminal, the Bitcoin network is presently encountering a significant surge in transaction fees, which is the highest observed in more than a year. The data indicated that the fees generated rose to $3.2 million, showing a remarkable surge of 64% in the last 24 hours.
As a result, the miner revenue to production cost momentum started to increase.
The Miner Revenue Momentum (MRM) is a measure of the combined profitability of miners at a given point in time, relative to a long-standing baseline. This assessment provides valuable insights into the state of the mining industry, as it can indicate whether revenue multiples are improving or deteriorating compared to the yearly average.
An MRM greater than 0 suggests that the mining industry is experiencing an increase in revenue multiples, indicating improved profitability for miners. Conversely, an MRM less than 0 suggests that the mining industry is experiencing a decrease in revenue multiples, suggesting less profitability for miners.
At the time of writing, the MRM turned positive.
Diving into miner pools
As miners’ profits start to increase, the overall selling pressure on them will begin to decline, which will impact BTC’s prices positively.
At press time, a large majority of the mining was being done by various mining pools. The mining was dominated by Foundry USA, which made up 28.5% of the overall mining share. Followed by AntPool and F2Pool, which made up 23.2% and 13.5% of the market share, respectively.
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Although miners encountered less selling pressure, holders did not have the same experience.
The MVRV ratio of Bitcoin increased significantly over the past few months. This indicated that many addresses holding BTC were profitable. As the profitability of the addresses grows, so will the incentive to sell.