The Bitcoin hashprice has dropped at a historically low level, making Bitcoin miners to maintain profitability. Hash price at this level could potentially indicate a bottom of the Bitcoin price before a renewed bull run, according to on-chain analysis CryptoQuant.
Historically, the correlation between Bitcoin’s price and the hashprice is positive. According to CryptoQuant, the hashprice is currently at its lowest point when the Bitcoin prices were also at their lowest or close to it. However, this could be a good opportunity for investors to buy Bitcoin with a long-term perspective.
Bitcoin (BTC) has faced resistance at the $65,000 mark, leading its price to consolidate around $60,000 trading currently for $58,425.19.
Miners are still facing the post-halving profitability hurdles after its all-time high in May 2024. Despite a squeeze on both Bitcoin miners and Bitcoin holders (long-term holders), long-term indicators continue to offer bullish sentiment for Bitcoin.
Hashprice, a key metric measuring mining profitability, is at a historically low level. Past data shows that these lows often coincide with Bitcoin price bottoms, followed by significant price increases thereafter.
“The highlighted sections in the chart indicate periods where the Hash Price dropped to lower levels, corresponding to times when Bitcoin prices were also at or near their lowest points,” explained CryptoQuant contributor Woo Mink-yu, referencing an illustrative chart. “Historically, these periods have coincided with Bitcoin price bottoms, suggesting that the current low Hashprice might indicate that Bitcoin’s price is near a bottom as well.”
The data suggests a parallel to the period following the 2020 COVID-19 market crash, which continued through the 2020 halving event.
Earlier reports indicated a decline in outflows from known miner wallets throughout July. CryptoQuant data now confirms that miners’ BTC reserve balance has increased, reaching 1,815,832 BTC at the time of writing.
This week, mining difficulty witnessed a predicted 3% increase, bringing it close to its all-time high of 90.66 trillion hashes per second, according to monitoring resource BTC.com.
Ki Young Ju, CEO of CryptoQuant, previously suggested that the overall picture for the US mining sector appears to be one of long-term sustainability. “Miner capitulation is nearly over, with hash rate nearing ATH,” he stated, referring to the Hash Ribbons indicator that tracks post-halving events. He further noted that “U.S. mining costs are ~$43K per BTC, so hashrate likely stable unless prices dip below this.”
While the near future may remain challenging for miners, the confluence of low hashprice and accumulating miner behavior could be interpreted as a sign that Bitcoin’s price may be nearing a bottom, potentially presenting a buying opportunity for long-term investors.
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