Mining Pulse is an indicator that measures the mining speed of miners. It mainly reflects the deviation between the average block interval of 14 days and the target time (10 minutes). Specifically, Mining Pulse can help us understand the following points:
Deviation represents the speed difference:
A negative value means the actual block time is faster than the target time, and a positive value means the actual block time is slower than the target time.
Negative values mean:
🔹Faster block times: If Mining Pulse shows negative values, it means blocks are being mined faster than expected.
🔹Hash rate growth: This usually happens when the network hash rate is growing faster than the difficulty is adjusted upward. That is, more computing power (miners) are joining, resulting in shorter block generation times.
🔹Network expansion: Indicates that the network’s hash power is expanding.
Positive values indicate:
🔹Slower block times: If Mining Pulse shows a positive value, it means blocks are being mined slower than expected.
🔹Hash rate drop: This usually happens when the network hash rate drops faster than the difficulty adjustment rate. That is, some miners may turn off their equipment (computing power withdrawal), resulting in longer block generation time.
🔹Miners offline: This indicates that some miners are going offline, reducing the total hash power of the network.
As shown in the figure above, the larger the positive value, the closer the current BTC price is to the mining cost line of miners, resulting in a larger scope for miners to surrender. In this cycle, from the bottom of the bear market to the present, there have been 5 cases where the Mining Pulse exceeded +0.05.
The first and second times occurred on December 27, 2022 and December 4, 2022, when the bear market was at its bottom and the BTC price was around $16,000-16,500. Mining Pulse reached 0.1, which means that the speed at which blocks were mined was about 10% slower than expected, and a large number of miners surrendered, and the market entered a severe winter period; this is usually a sign that the bottom is about to appear.
The third time was after the ETF was approved in January 2024, when the BTC price fell back to $39,450;
The fourth time was when BTC broke through the $70,000 mark and a large number of short- and medium-term chips took profits, causing the price to fall back to $58,200.
The fifth time is now, Mining Pulse has reached 0.072;
Looking back at historical data, if you buy BTC near the mining cost line every time, it is equivalent to obtaining BTC at a lower cost than the miners. From a medium- to long-term perspective, the certainty of obtaining profits is greater than the uncertainty of taking risks.
