Bitcoin Hashrate Plummets – What Impact Will It Have?
Key facts:
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According to Willy Woo, the departure of weak miners is the necessary step for bitcoin to rebound upwards.
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Bitcoin remains relatively strong above the $60,000 support.
Bitcoin hashrate has seen a significant drop in recent weeks, approaching 2024 lows.
Over the past month, Bitcoin’s hashrate has dropped from 638 EH/s to 557 EH/s, which is a 12% drop from its all-time high, as seen in the chart below from LookIntoBitcoin.
Colin Harper, head of research at Bitcoin mining company Luxor, noted that It’s too early to say for sure what the next difficulty adjustment will be.but all initial signs point to it being another downward adjustment.
This downward adjustment would be a “temporary lifeline” for miners who are near or at breakeven, according to Harper.
This is because last week, Bitcoin’s hash price fell below $50/TH/day for the first time in over a month. The hash price is a value used to measure the profit potential of mining operations.
Harper also mentions that the hottest months of the year in the United States (July and August) must be taken into account, so he would not be surprised to see the Bitcoin hashrate range remain below 600 EH/s during that period. .
The increase in temperatures usually causes greater energy consumption by mining equipmentwhich could further discourage this activity.
Precisely, what is happening with Bitcoin mining has influenced the fall in the price of bitcoin (BTC).
According to Willy Woo, a professional trader and market analyst, what is mainly causing the decline of bitcoin It is a capitulation of weak minersas reported by CriptoNoticias.
These miners are those who mine Bitcoin, but have not been able to cope with the reward cut brought about by the most recent halving.
Martin Hiesboeck, head of research at cryptocurrency exchange Uphold, agrees with Woo, saying that “all US miners are now in the red.”
In Hiesboeck’s opinion, miners have to continue selling BTC to make ends meet. This is due to the centralization of miners, their actions and economic planning, which also have a “huge effect on the price of bitcoin.”
The price of bitcoin has fallen more than 6% in the last week and almost 12% in the last 30 days. At the time of this publication, each BTC is trading in the area close to $61,100, remaining relatively strong above the $60,000 support, as seen in the following TradingView chart.
Since BTC reached its all-time high of $73,000 last March, it has been in a sideways channel from which it has not yet been able to break out, as seen in the chart above.
How long until we get out of lateralization? According to Woo, “there are probably 1-4 more weeks of cooling left before bitcoin price action gets dull enough.” After that, a major recovery could begin that takes bitcoin out of its sideways range.
Perhaps, this drop in hashrate could be marking the capitulation that Woo is referring to. When a bounce is seen in this metric, the price would begin to rally higher.
