According to data from The Block, the active supply of Bitcoin and Ethereum is currently at historically low levels. For both cryptocurrencies, the proportion of tokens that have experienced transactions in the last year has dropped to all-time lows.

Between March 2017 and 2018, when Bitcoin peaked, more than 59% of its supply was traded actively. But only 30.12% of Bitcoin’s supply changed hands the previous year. Comparably, Ethereum has reached a new low, with only 39.15% of its supply being actively traded during the last year. Before this, more than 86% of Ethereum’s supply was in motion between July 2016 and 2017.

For Bitcoin, the drop in active supply is especially noteworthy because it comes before the expected halving of block emission incentives in April of the following year. Additionally, according to data from The Block, the proportion of tokens that have not been handled in three or five years is at an all-time low.

Just 58.58% of the total Bitcoin supply has been transacted over the last three years, down from a peak of over 73% in late 2019. Like this, the five-year active supply has decreased from 83% to 70.13%. The state of the cryptocurrency market is attractive because network transactions are almost at their peak despite the rise in the amount of inactive coins.

Bitcoin’s Hashrate

Bitcoin and Ethereum are Now at Historically Low Supply Levels - These 2023 levels Could Signify a BTC Price Surge

The Bitcoin hash rate as of November 19, 2023, is 468 exahash per second (EH/s), faster than the 10-minute block interval average that was expected. With the most recent block processed in a mere 7 minutes and 37 seconds, a 3% difficulty increase is expected, the seventh straight increase since September 19.

Block timings have continuously been less than the intended average of 10 minutes, with 93.08% of all BTCs intended for circulation already mined, or around 19,546,861.78 BTC at block height 817,532. With a median average of 9 minutes and 40 seconds during the previous day, the range varies from 9 minutes and 43 seconds to 7 minutes and 37 seconds.

The seven-day simple moving average (SMA) for Bitcoin’s hash rate is approximately 468 EH/s, slightly less than the peak of 475 EH/s reached on November 5, 2023, despite a previous difficulty adjustment.

The hash rate of BTC is still increasing. It is anticipated that during the upcoming difficulty phase, which is set for November 26, 2023, there will be a 3% rise in mining difficulty. This phase will be due to the steadily increasing hash rate and faster block intervals.

Because of the faster block production rate, the milestone event might happen as early as February or March 2024. This event might happen with about 22,000 blocks left until the next halving. According to computations using a consistent ten-minute block average, the most likely date is April 20, 2024. A predicted 3% increase in difficulty would make it 67.68 trillion instead of 64.68 trillion, which is challenging for miners looking for block rewards.

Mining BTC Has Been Increasingly Difficult

Bitcoin and Ethereum are Now at Historically Low Supply Levels - These 2023 levels Could Signify a BTC Price Surge

The difficulty of mining bitcoin (BTC) has been rising biweekly during the last two months, affecting miners as the market approaches a tipping point. Several variables —including the advent of more productive mining equipment that produces more terahash per second (TH/s) — can be blamed for the spike in Bitcoin’s hash rate. Furthermore, since January 2023, there has been a notable 120% increase in the price of Bitcoin, contributing to an astounding 79% increase in hash rate and a far more significant 89% increase in difficulty.

In conclusion, the rebound of Bitcoin to $37,000, coupled with positive on-chain signals, suggests renewed investor confidence and potential market strength. In the coming days, we might see a more bullish trend for Bitcoin and Ethereum. The low economic supply signifies a price increase. This condition might be the case for Bitcoin and Ethereum.

However, cryptocurrency markets are volatile, and monitoring ongoing developments is crucial for a comprehensive assessment.