This chart is the Bitcoin mining revenue which is a combination of the number of coins produced, transaction fees and the market price. All of which I think you'll agree are important factors for Bitcoin miners. As you'll see the price bottoms of bitcoin coincide exactly with mining revenue bottoms. What's even more illuminating is that mining revenue always closes the structural gap to the a previous resistance level (green horizontal lines). This allows us to determine with relative simplicity when Bitcoin has bottomed.
Chart is available by entering QUANDL:BCHAIN/MIREV in the search box.
The higher the price of bitcoin the more revenue the miners will make.
Am I missing something here or is miner revenue not just a lagging indicator of price?
RealMcafee
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@codex42, The revenue always bottoms on previous resistance, thus closing the structural gap. People expect the price to do this but actually it doesn't always. If it did then the price should return to $1000. But revenue always retests the previous resistance. In December it bounced off the 2013 top. This is what many people were expecting the price to do (and still are, some of them). You also see the price and revenue markets bottom at the same time, but the price bottom appears to occur wherever it wants. The revenue always retests previous resistance. Revenue is the real chart, because revenue is driven by more than just price. It depends on earnings (fees, coin generation related to price) and outgoings (electricity related to hashrate/difficulty). Revenue is what the miners are really interested in. And it is the miners which obviously determine this market to a greater extent.
codex42
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@barclayjames, I get what you're saying now. Gave the chart a like. It looks like hashrate/costs aren't factored in to this data but it's an interesting structural relationship.
RealMcafee
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@codex42, I noticed afterwards, it is: (coins + fees) * price
however, from a technical perspective the 'structural relationship' is the interesting point, not the fundamental explanation (although would be really interesting to know what really goes on). Full disclosure, I think market bottomed in December and am trading on that basis, mainly because of this chart.
consensio
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@RealMcafee, you can put hash ribbons indicator on the MIREV chart as well. Actually Im wondering if it isnt a more accurate depiction of actual network "Value" (hashrate, miner rewards, halvings etc.) than hash ribbons simply plot on the price (which is an expression of these factors anyway). So there is a way. I like your structural observation.
francescoxy
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Hi RealMcafee, is it possible to view the script please?
Am I missing something here or is miner revenue not just a lagging indicator of price?