Bitcoin hash rate saw a significant decline over the past three weeks – a positive thing for Bitcoin price
With the Bitcoin price dropping from $ 10,500 to as low as $ 3,800, it makes it no longer profitable for many small mining operations. Miner’s ongoing capitulation is illustrated while looking towards Bitcoin’s hash rate, which has seen a significant decline over the past three weeks.
The decline may be far from over
The reason is that several simple factors seem to indicate that many miners may surrender shortly. However, the final hashrate drop could likely be a positive thing for Bitcoin’s price, with the investment of smaller miners potentially easing some of the selling pressure on cryptocurrency.
Bitcoin hashrate has dropped significantly in the past few weeks along with the price of Bitcoin, plummeting from an all-time high of around 125 million TH/s in early March to current levels at approximately 100 million TH/s – 20% drop.
This decline occurred when BTC showed signs of technical weakness, with the recent sell-off that led many smaller mining companies to shut down due to unprofitable.
Why can hashrate falling help Bitcoin price soar?
Although some people have noticed a reduced hashrate is a symbol of the network’s potential weakness. But this could be a sign that Bitcoin is ready to witness a remarkable recovery shortly.
Mining companies provide the cryptocurrency market with steady selling pressure, selling Bitcoin in exchange for sustained fiat for their operations. This is especially true when it comes to smaller mining operations, as large companies can operate at unprofitable levels due to their large capital stock.
When the price of Bitcoin plummeted to the point where it was no longer profitable, many smaller operations temporarily ceased operations. At the same time, the more significant services hold their acquired BTC in hopes of selling it for a profit at more favorable prices.
Therefore, the hashrate reduction could signal that Bitcoin is about to witness a stream of selling pressure provided by miners weakening, creating significant opportunities for cryptocurrencies. This number will likely further decline in the near-term as well, the crypto’s upcoming mining rewards halving and current technical weakness may make mining BTC even more unprofitable.
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