Recent indicators suggest a robust improvement in Bitcoin’s network health ahead of the upcoming halving in April.
Notably, the network’s hash rate reached a record 500 exahashes per second, spotlighting the current high level of mining activity and, consequently, the network’s safety. So, here are some positive signs that the market is giving us before Bitcoin’s halving.
1) The recorded hash rate of 500 exahashes per second is an all-time high.
On-chain analytics from CryptoQuant reveal that outflows from known miner wallets to exchanges have hit their lowest levels in seven years.
This metric indicates a reduced movement of coins from miner wallets to exchange wallets, reflecting subdued activity by these entities in the open market. So, speculation arises regarding miners’ cautious approach, with limited BTC sales to sustain operations while anticipating potential BTC ETF approvals.
Miners may opt to hold onto their coins, potentially leveraging borrowing to cover expenses, especially considering the impending halving event, which many expect to double production costs.
2) Declining BTC Balances on Exchanges Amid Turmoil
Following a tumultuous month marked by withdrawal disruptions and legal actions against major crypto exchanges, BTC balances are once again on a downward trend. This reflects a broader pattern observed over the past five years, the reserves of BTC on exchanges continue to dwindle even lower.
Source: Glassnode
As per insights from on-chain analytics firm Glassnode, the collective BTC holdings of major exchanges have reached 2.332 million BTC.
It represents the smallest pool of available BTC since April 2018, excluding the recent lows witnessed in October. In contrast, the peak was recorded in March 2020, shortly after the cross-market crash triggered by the onset of the COVID-19 pandemic, with a total of 3.321 million BTC.
Besides, the aftermath of Binance’s record $4.3 billion fine and the traders’ reactions and withdrawal halts from exchanges like Poloniex and HTX following a hack further complicated the scenario in November. This means that we will not see major crashes (Excluding Black Swan events, and big whale manipulations), but some corrections.
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