Bitcoin reacted strongly to the US central bank’s rate cuts on Wednesday. After the 0.50% cut, the Bitcoin price shot up to $64,000. But that’s not the only thing that seems to be making Bitcoin bullish at the moment.
The hashrate also plays a role in this, provided that the historical data does not deceive us.
Bitcoin price and hashrate divergence is bullish
If we are to believe the analysts at Glassnode, the current divergence (movement apart) of the Bitcoin price (black) and the hashrate (blue) is bullish for the digital currency.
The chart above shows this interesting relationship. Over the past few years, such a divergence has occurred a few times, and in some cases, it has been accompanied by a price bottom for Bitcoin, followed by a rally after the price has caught up with the rising hashrate.
In line with this pattern, the Bitcoin price has already recovered by $9,000 since reaching the local bottom on September 6, marking a 15% increase.
From July, the hashrate and the Bitcoin price started to diverge. This continued until September. While the hashrate reached an all-time high, the Bitcoin price was dangling at 54,000 dollars. Now the market is in a completely different position again.
Why is Bitcoin’s hashrate increasing?
The hashrate represents an estimate of the total amount of computing power in the Bitcoin network. According to experts, the recent increases are mainly due to investments from publicly traded miners.
Before the halving, Bitcoin’s hashrate was at 650 EH/s, only to drop to 550 EH/s after the block subsidy halving. Weaker miners are being squeezed out of the market by the halving, leaving only the strongest ones.
Now the hashrate has returned to pre-halving levels and listed miners are doing well.
The above chart from TheMinerMag shows that the market share of listed miners in the Bitcoin hashrate increased significantly after the halving. They were clearly better prepared for the block subsidy halving.
Source: https://newsbit.nl/bitcoin-koers-en-hashrate-lopen-uit-elkaar-en-dat-is-bullish/
