Despite the market downtrend and over 70% price drop since the last peak, Bitcoin’s hashrate has exploded. Data from crypto analysis firm Glassnode indicates that the largest cryptocurrency network has a new record hashrate.
The recorded value is 242 exahash per second over the past seven days.
Bitcoin’s price seemingly follows the news. According to CoinMarketCap’s chart, Bitcoin has rebounded to the $20,000 area, an increase of 3% in the last 24 hours and over 5% in a week.
Bitcoin’s Hash at New All-Time High
It’s possible that the correspondence between hashrate and price reaction delivers a bullish sign to the market, especially to those who have a solid belief in the Proof-of-Work mechanism.
Many people generally agree that the increase in hashrate proves that miners don’t give up on the network and keep contributing, leading to the price surging and vice versa.
Despite the general slowdown in global financial markets and the subsequent collapse of the cryptocurrency market, Bitcoin miners are persistently securing the Bitcoin network, and the market has the right to remain bullish.
Although hash rates do not always exactly reflect the market price of the digital currency at the time, there are instances where they do. As the price fell dramatically on December 15, 2018, so did the hash rate, with a severe decline reflecting miners’ over-adjustment.
Mining Looks Good Too
Miners, on the other hand, rapidly resumed operations in the summer of 2021, leading the BTC mining hash rate to remain over 86 exahashes per second. A few weeks later, the price of Bitcoin reached a new high.
Historically, the total hashrate of Bitcoin has a lot of correlation with the price. That explains why some on-chain analysts often observe the rise and fall of hashrate as one of the key indicators for trend prediction.
According to recent reports, the revenue generated by Bitcoin miners has decreased by 72% over the course of the past year. The revenue generated by bitcoin mining has dropped to less than $20 million per day, according to data provided by Blockchain.com.
This is a significant decrease from the previous year when miners were generating over $62 million per day. The bear market and the worldwide energy crisis, which has led to increased electricity bills, have had a substantial negative impact on miners.
Is It Time To Celebrate?
After a rollercoaster ride, the market is taking it easy. It is awaiting a catalyst or event that will either inflate or drop the price. That could be triggered by the new ATH hashrate.
Bitcoin investors may finally have reason to rejoice. However, investors should exercise caution because the king of crypto is not yet out of the woods.
Nothing is confirmed as long as Bitcoin’s price continues in this channel. According to the crypto consultancy platform Eight Global, BTC will only be bullish if the price breaks through the resistance zone of $20,100 – $20,340.
Another possibility is that the price falls below $17,000, which appears to be the best level for a bull run to begin. However, the price of Bitcoin may not return to it by breaching the resistance level.
Since November 2021, Bitcoin has been in a medium-term to long-term downward trend. It demonstrates that the cryptocurrency is still in a bear market and that sellers should be in control.
The crypto fear and greed index currently stands at 25 – high fear – indicating that gloom continues to control the market.
In the event of a bearish scenario, a positive reaction on this level will be a bullish indicator if the Bitcoin price incorrectly breaks out of the ascending channel.
Inflation is real, and the global geopolitical situation is not encouraging. Geopolitics, costly energy, and currency collapse are all excellent ways to exacerbate hyperinflation. Many analysts predict that the worst-case scenario will gradually take shape.