Bitcoin Hashprice Decline Signals Potential Price Bottom Resembling March 2020
In a recent post on August 30, the onchain analytics platform CryptoQuant discussed the current state of Bitcoin (BTC) price movements, indicating that these movements are approaching long-term lows. The analysis of hashprice suggests that the BTC price is nearing a potential bottom. Despite the challenges faced by both miners and investors, long-term metrics for Bitcoin continue to support a bullish outlook for the month. Miners are grappling with profit obstacles post-halving, as recent data reveals their hashprice is exceptionally low, highlighting a concerning trend.
Hashprice, which measures miner costs on a per-terahash basis, is significantly diminished at present. According to CryptoQuant, historical trends suggest that instances of low hashprice coincide with Bitcoin price bottoms, illustrating a potential correlation. Contributor Woo Mink-yu elaborated on this relationship, stating, “The highlighted sections in the chart (blue boxes) indicate periods where the Hash Price dropped to lower levels, corresponding to times when Bitcoin prices were also at or near their lowest points.” This historic pattern implies that the current low hashprice may signify that Bitcoin’s price is approaching a similar nadir.
The last comparable scenario emerged following the March 2020 market downturn due to the COVID-19 pandemic, which persisted leading up to that year’s halving event. Additionally, Cointelegraph recently conveyed that outflows from known miner wallets have diminished throughout July. Interestingly, recent data from CryptoQuant reveal that miners have resumed accumulating Bitcoin, with their reserve balance currently reaching 1,815,832 BTC.
In the past week, Bitcoin mining difficulty has surged by an expected 3%, positioning the metric almost at its all-time highs of 90.66 trillion, according to BTC.com. Earlier this month, CryptoQuant’s CEO, Ki Young Ju, remarked that the overall circumstances within the United States mining sector are indicative of sustainability. He stated, “Miner capitulation is nearly over, with hashrate nearing ATH,” referencing post-halving trends captured by the Hash Ribbons indicator. Ju further elaborated that “U.S. mining costs are approximately $43,000 per BTC, so hashrate is likely to remain stable unless prices dip below this threshold.”
It is important to note that this article does not provide investment advice or recommendations. All investment and trading decisions entail risk; thus, readers are encouraged to conduct their own comprehensive analyses prior to making any financial commitments.
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