Special indicators on Bitcoin relationship with major miners are a burst of valuable insights that are little known to investors. In this post, we will explore some of these indicators!

The first one compares the top 15 cryptocurrency mining companies with the largest market caps and processing power. Recent data shows that Riot Blockchain and Marathon are the companies with the most influence on the overall capitalization of mining.

The second one shows the aggregated Market Cap of these companies, serving as a powerful indicator for comparison with Bitcoin and cryptocurrencies in general. The peaks coincide with those of Bitcoin, underscoring the significant importance of mining in cryptocurrencies.

To facilitate understanding and aid in analyzing when Bitcoin is more correlated with the Market Cap of mining companies, a correlation heatmap has been created. Something unexpected emerges here: when the correlation is low or negative between Bitcoin and miners, the price of Bitcoin undergoes significant trend changes, making it an excellent sentiment indicator. Recently, it indicated a negative correlation at the same level as the end of 2019, suggesting that the BTC price moved in one direction while miner stocks moved in another.

For better comprehension, we have developed the Miners' Index (Weighting). The result is an indicator demonstrating that miners see their stocks decline before a downturn in BTC. In other words, miners anticipate Bitcoin movements. This indicator reveals how important miners are to Bitcoin, considering they hold a significant amount of BTC in their reserves.

Looking at the Miners' Index (Average), which takes an average for all companies, we observe that interest in the relationship between Bitcoin and miners somewhat diminished in 2021, followed by a Bear market cycle in miners and consequently, in Bitcoin.

Even though miner stocks are very close to the bottom, interest in mining has reached new highs and peaks. The Miners Momentum indicator measures how strong mining is at a glance of market cap vs. Hash Rate. Higher values are not necessarily good for miners but are significant for the Bitcoin network, demonstrating solid growth and network security.

The Miner Transaction Revenue Index is an indicator that monitors and assesses the revenue generated by miners participating in the Bitcoin network. This metric takes into account processed transactions along with transaction fees associated with those transactions, reflecting the compensation miners receive for transaction validation and network security. The index offers a comprehensive view of the financial health of miners in the Bitcoin ecosystem and is crucial for understanding the economic sustainability of the network, as well as the attractiveness of Bitcoin mining for network participants. Recent high values refer to the number of Ordinals, something on the rise in the network since early 2023. However, we can consider that the recent increase is different from the actual demand we saw between 2020 and 2021 when interest in Bitcoin was high.

We can see that with just these indicators presented here, it's possible to observe the high level of importance of miners, justifying a deep exploration of mining stages and their impacts on Bitcoin and cryptocurrencies in general.