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Is Bitcoin Ready for a rally as Miners return?

Since June, cryptocurrencies have suffered a major rout, with bitcoin falling to its lowest price since an all-time high of $69,000, to $17,618, its lowest price since this bear market.

In addition to causing a huge explosion of positions in the contract market directly, the collapse caused huge losses for investors

Bitcoin miners have been forced to shut down their mining machines in order to lose profitability due to falling prices, in addition to selling their bitcoins in large quantities to gain cash flow.

However, miners are likely to resume digging as the market recovers.

Over the past two weeks, Bitcoin has rallied more than 28.57% from its bottom to $246.66 million.

So far, Bitcoin has traded around 23,000.

The rise in Bitcoin prices has prompted some crypto miners to turn on more mining machines, even as much of the US remains in the grip of heat that is driving up demand for electricity.

The price of bitcoin has risen 6.2% since July 7,

Over the same period, Bitcoin network difficulty rose 1.7%.

13f4a58c680f1f03d605571dc6518eefThe previous biweekly adjustment rate fell to its lowest level since nearly a year ago as miners shut down mining machines. While many Bitcoin mining machines suspended operations as electricity prices soared in the heat, a rebound in bitcoin prices over the period boosted mining revenues and prompted more miners to restart their machines.

"The rise in bitcoin prices has increased miners' profitability, and some miners who were forced offline in June and July may have reconnected to their mining machines," said Jaran Mellerud, Crypto mining analyst at research firm Arcane Crypto.

Bitcoin miners are flocking to southern states like Texas and Georgia, where they typically benefit from lower energy prices and looser regulations. In early July, record heat in Texas caused power shortages, forcing nearly all industrial-scale mining companies to shut down their mining machines in the state.

However, judging from the recent market performance, Bitcoin has been significantly sideways, market analysis, which may be a signal of a new round of price decline.

According to analysts at Glassnode, a cryptocurrency research firm, bitcoin active addresses are entirely in "a well-defined downlink channel". Cyber activity, they added, "suggests that the inflow of new demand so far remains small." At the same time, however, trading demand has trended sideways or down in recent weeks, suggesting that "only the basis for high confidence among traders and investors remains in place".

In addition, on-chain transaction fees are in "bear market" territory, and any upturn could signal recovery.

"Historically, a bear market in 2022 has been negative for the digital asset space," the analysts wrote in a note. "However, after such a sustained period of risk aversion, attention has turned to whether this is a bear market relief rally or the start of a sustained bullish impulse."

In conclusion, the current bottom of bitcoin bear market shock is obvious, the market may continue to decline, but with the recovery of the market, the market tends to be stable, the overall upward trend is still very obvious.

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