Bitcoin Hashrate Drops to Lowest Since 2022: Miners Capitulate amid Post-Halving Hurdles
Summary:
The Bitcoin hashrate, a measure of the Bitcoin network's computational power, has reached the lowest since December 2022, post-FTX's collapse. CryptoQuant data indicates a potential market bottom for Bitcoin, supported by low selling pressure revealed by other metrics. There have been signs indicating that miners have started to surrender, hinting at possible buying opportunities. Post-halving miner withdrawals have reduced up to 90%, suggesting reduced selling pressure and a potential increase in Bitcoin's price. A report by Cantor Fitzgerald highlighted challenges for miners post the 2024 halving event, including potential insolvency for 11 notable mining companies if Bitcoin's price drops to $40,000.
The Bitcoin hashrate turbulence, a gauge that indicates fluctuations in the computational strength of the Bitcoin network, has reached its lowest point since December 2022. This was just after the downfall of FTX amidst the harshest period of the last bear market. As per information gathered by CryptoQuant, the accurate Bitcoin Hashrate Turbulence is currently marked at -7.6%, hinting at a potential lowest price point for the non-centralized asset. Other factors contributing to the prediction of a market low include Bitcoin Exchange Reserve, the Miners Position Index and the Bitcoin Miner Reserve, all indicative of reduced selling pressure.
Lately, numerous signals have pointed towards miners starting to surrender, suggesting possible buying chances for Bitcoin (BTC). Early in June, Charles Edwards, founder of the cryptocurrency hedge fund Capriole, proposed that the Bitcoin Hash Ribbons indicator created by his company was flashing a buying signal in line with the comparative deceleration in network computational strength.
Hash ribbons calculate the network’s hashrate by juxtaposing the 60-day moving average of the Bitcoin hashrate against a 30-day average. When the 30-day average dips beneath the 60-day average it exhibit a comparative reduction in hash power.
Market observer Will Woo expressed similar views to Edwards, stating that the market won't see new peaks until weaker miners are compelled to close their operations - an event that usually takes place in the following weeks of a halving event but seems to be enduring in the current cycle.
Recently, Bitcoin miner withdrawals decreased up to 90% post-halving, suggesting that selling pressure from miners has lessened and predicting an upward trajectory for Bitcoin's price.
Looking forward to the April 2024 halving event, financial services firm Cantor Fitzgerald published a report delineating the issues miners might encounter due to the reduced block subsidy. The report cited 11 mining companies, which include Marathon Digital, Hut8, and Argo Blockchain, at potential risk of becoming unviable owing to high mining costs coupled with lower rewards. If the market price of Bitcoin drops to $40,000 as per the report, some of the biggest mining companies globally would be compelled to give up, underlining the predicament of the mining industry post-halving.
Published At
7/2/2024 12:39:10 AM
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