Thread by @dilutionproof

1/7 Short 🧵 on the recent hash rate drop in #Bitcoin, its recovery and the impact of that on several on-chain metrics ⛓️

On April 16th, hash rate on #Bitcoin had a steep decline related to to a power outage in China, to which it is now recovering - it even approaches new ATH's

2/7 As a result of the hash rate drop, block interval times increased, which means that blocks were temporarily being produced at a (much) slower pace than the normal 10 blocks/min

As miners came back online & mining difficulty adjusted downwards, blocks are now coming in fast

3/7 Blocks coming in at a faster pace has done wonders for the mempool congestion & related transaction fees, making on-chain #Bitcoin transactions cheaper again

Over the past 24 hours, miners were even churning through the mempool transactions paying a 5 sat/vByte fee

4/7 Another consequence of the recovering hash rate and shorter block-intervals is that the daily coin issuance has increased again

This increase is likely just a temporary overcompensation to the recent drop, and will normalize again after the next difficulty adjustment

5/7 The ramped up daily coin issuance means that the Puell Multiple (which is the ratio between the daily coin issuance and its 1-year moving average) has also recovered

This is a good example why the day-to-day variance in metrics like the Puell Multiple can be a bit 'noisy'

6/7 A simple way to filter out that noise is to apply a moving average

Here, a 14-day moving average is used, correcting for the noise within a difficulty adjustment period (2016 blocks = ~14 days)

7/7 To close off this thread, something to look out for 👀

During the hash rate dip, the hash ribbons indicator flagged 'miner capitulation' & will give a buy signal (blue dot) soon when it has recovered

(Wondering if these unique circumstances invalidate that signal though)