Bitcoin maintained a breakthrough of $28,000 at midday on Wednesday (March 22) at $28,187. On-chain data shows that bitcoin is at a key inflection point to break through the bear market, and the MVRV indicator at the beginning of this week saw a typical situation of bull market and bear market conversion, and on-chain activity was more active in bull market cycles, and bitcoin miner income soared by 36%. As a bet on bitcoin rising above $1 million in 90 days sparked a discussion across the cryptocurrency community, the proponents once again emphasized that bitcoin is a safe haven from the Fed's policy chaos.
Bitcoin inflection point appears
Blockchain data company Glassnode's latest blockchain report said in its latest report that bitcoin recorded one of the best weekly performances in history, with a 7-day closing gain of 35.8%. Looking back at the history of the crypto market, only 124 trading days have had a larger 7-day rally, and only 16 days if you count from 2015, and this happened in the late stages of the bull market.
Glassnode believes that the momentum indicators on multiple chains show that blockchain network usage is continuing to expand, and that Bitcoin's price action has left the cyclical low and entered a middle ground, which is typical of early bull market cycles. It is now necessary to observe the dynamics of these long-term holders and assess whether long-term holders are ready to take profits and whether there is a risk of creating short-term Bitcoin selling pressure.
The report starts by observing on-chain activity, pointing out that on-chain activity is usually the more the better. When more and more people interact and transact in the Bitcoin economy, it is usually associated with future periods of mass adoption, network effects, and active investors. The average number of daily trades this week reached 309.5k, the highest level since April 2021 and a major break from the annual average, above all historical data of 88.8%.
At the same time, due to new demand for Ordinals and Inscriptions, the 2-year Z-Score of miners' income has turned positive. High fees are a common feature of more constructive markets in the future, coinciding with new waves of mass adoption.
The total revenue of miners has now surged to $22.6 million per day, which has recovered to its highest level since June 2022 and significantly exceeds the annual average. As with the above activity, this is usually observed at the time of market turning.
As the price of bitcoin soared, U.S. investment bank Stifel said in an analysis on Monday that the first quarter of the year will be a better quarter. According to the figure below, the break-even electricity price of equipment that consumes 50 watts of power per second under the same unit of computing power has been around $0.06 per kWh.
In terms of the more efficient Bitcoin mining machine S19 XP, the current profit per kWh is about $0.156, and the gross profit margin has climbed to 61.5%. Against this backdrop, the ASIC mining market began to move higher in late January this year for the first time since December 2021. According to Luxor, which runs the ASIC Trading Desk, the most efficient machines have risen 9% in price over the past two months.
HashPrice, which is often used to measure miner income, affects factors such as bitcoin price, bitcoin block reward, mining pool fees and other factors, and miner income has risen nearly 36% compared to the beginning of this month to $0.08 (TH/s).
A Core Scientific spokesperson said last week: "The market has helped us a lot, and electricity bills have dropped significantly. For Bitcoin miners, the cost of electricity is the main expense, and we are spending a lot of money to pay professional fees, but the operational side is very good. ”
Matthew Schultz, CEO of bitcoin miner CleanSpark, also said in an interview: "For us, it's a pure windfall, and when you see the price appreciation of bitcoin, if you mine 20 bitcoins a day, that's basically equivalent to getting another $200,000 a day in free cash flow, and we're in roughly that mood." ”
In addition to the surge in miner returns, an observation of the MVRV on-chain indicator shows that Bitcoin has now transitioned from the typical scenario of a deep bear market to a more neutral and constructive zone.
The report pointed out that the MVRV kinetic energy oscillator is also a powerful tool to identify the phased transformation of bulls and bears, and it is currently in the process of breaking through 0. The indicator is very responsive to events where a large percentage of the token supply is acquired above or below the spot price and quickly recovers to holding unrealized losses or profits, respectively, that is, close to the inflection point of the cycle.
The current MVRV momentum has just flipped to a positive number, which means that a large part of the token supply was obtained below the current price and is now back to profit. Similar to the above indicators, past examples of positive flipping tend to be associated with rising internet adoption and on-chain activity.
Bet that the price of the coin rose above 1 million and stabilized?
Balaji Srinivasan, former chief technology officer of crypto exchange Coinbase, took to Twitter a few days ago to accept a bet from financial expert James Medlock. If the price of Bitcoin reaches $1 million within 3 months, Balaji wins, and vice versa, James wins, with a bet of 1 BTC and $1 million.
Balaji previously tweeted to warn netizens: "The United States is printing $2 trillion to cover up the collapse of the traditional financial system, which will lead to hyperinflation in the dollar, and recommends that everyone buy bitcoin." ”
However, as soon as the news came out, the cryptocurrency community was full of doubts about Balaji's motives, and many people thought that this bet was simply for eyeballs, after all, Bitcoin will rise more than 35 times in 90 days, which is indeed a bit beyond reality.
In the face of various questions, Balaji also tweeted in response on Tuesday night. He wrote: "I am not trying to make money on this, the Fed's crazy money printing will cause hyperinflation." ”
He first responded to questions about his motives, stressing that the bet was made by James and that he was only passively accepted. At the same time, he explained that the bet is essentially a collision of the ideology of traditional financial markets and the two concepts of free marketism, and repeatedly promised that he would not use this speculation to sell bitcoin.
"I didn't make the bet, I just accepted it. I have no incentive to make a profit and will not exchange my Bitcoin holdings for dollars unless I am legally compelled to do so. I will hold Bitcoin until the dollar is no longer the world's reserve currency. ”
"The only time I had warned before was in January 2020, when I did everything I could to get the word across, and the coronavirus pandemic ended up claiming millions of lives. So I'm doing this only to remind innocent Americans and dollar holders that the Fed is about to print big money. ”
He also reiterated: "The Fed crashed the ship, they caused their own banks to fail, and bitcoin is an outlet to escape the chaos." ”