After the infamous LUNA crash, bitcoin on-chain activity fell into the red. The cryptocurrency market collapse was a disaster that has affected investors’ confidence and led to a significant drop in activity. Miners are suffering as transaction volumes and fee revenues have plummeted. This has all led to big losses for them. Daily miner revenue is now at a yearly low.
Bitcoin-On-Chain Activity Drops
In the midst of the LUNA crash, the previous week saw on-chain activity increase. This was mainly due to investors trying to get their money out to stay ahead of the downtrend. Also, exchanges needed to restructure bitcoin wallets in the wake of increased activity.
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There was a noticeable increase in both the volume of transactions and the average transaction. This did not result in more revenue, but miners saw a 21.55% drop from last week. The LUNA crash caused miner revenue to plummet even further. An additional 7.95% loss brought the daily revenues up to $25.5 million. Revenues were last at this level in July 2021.
Source: Arcane Research| Source: Arcane Research
On-chain activity is now back to normal after the market has recovered from its crash, and with the restructuring of the exchange wallets completed. What this resulted in has been a 44% collapse from the previous week and daily transaction volume is down almost 50% from last week’s levels.
The Mining Difficulty Backup
For the past few weeks the bitcoin mining difficulty has been declining. The block production rate had surpassed the goal of 6 blocks an hour about three weeks back. The mining difficulty was corrected, and the difficulty has since returned to normal. This adjustment saw block production drop to below 5.64 blocks per anhour, well below its target.
Source: BTCUSD at TradingView.com| Source: BTCUSD on TradingView.com
Also, the percentage of revenues made up fees has dropped to 0.69% from the previous week and now stands at 1.81%. It was not surprising considering that fees per person had declined by 33.48% in the same time frame. The daily transaction volume was also lower at 6.185 to 252,532 transactions.
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Bitcoin’s price had also taken a huge hit that had contributed to the decline in daily miner revenues, alongside the decreased block production rate which is now at an all-time high. On Wednesday, a modification is anticipated that will reduce the mining difficulty by between 4% and 5.5%. This will likely increase the block production rate and, if the price for the digital asset responds, miners could see significant increases in their revenues.
Featured Image from Seeking Alpha. Charts from Arcane Research and TradingView.com.
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