Bitcoin hashrate drop hits 2022 levels
The indicator decreased by 7,6%
![Bitcoin hashrate drop hits 2022 levels](https://storage.getblock.net/source/1/FoGFHN_tl6TmwOD8Mc4bFbPMdMcblJJo.webp)
02.07.2024 - 08:30
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The material is not an investment recommendation and is published for informational purposes only.
What’s new? The bitcoin hashrate drawdown, which measures the decline in the relative computing power of the network, reached the level of the previous bear market in December 2022. Back then, the drop followed the bankruptcy of the FTX crypto exchange. According to data from the analytics platform CryptoQuant, the hashrate is currently down by 7,6%, indicating that the bitcoin price has potentially bottomed out.
What else is known? Other indicators such as the bitcoin exchange reserve, miners position index (MPI), and bitcoin miner reserves are also in favor of the market hitting bottom. Each of these is at marks indicating low selling pressure. The capitulation of miners signals a potential buying opportunity for bitcoin.
Early last month, Charles Edwards, founder of the Capriole cryptocurrency hedge fund, said that the Hash Ribbons indicator he developed was signaling a buy signal based on the relative slowdown in the network’s processing power.
Hash Ribbons are used to determine the global bottom of the bitcoin price and the possibility of miners capitulating. It compares the 60-day and 30-day moving averages (MA) of the hashrate. When the 30-day MA falls below the 60-day MA, it indicates a relative decline in hashrate.
Analyst Willy Woo believes that the market will not reach new highs until weak miners are forced to cease operations. The demise of underperforming cryptocurrency mining sites is traditionally seen in the weeks following a halving, which occurs every four years and halves the reward for mining blocks.
![Fees on the Ethereum network and bitcoin miners’ revenues have approached their lows](https://storage.getblock.net/source/1/Aoer91e8pfcamNujAsjCzefMHsMBpDzR.png)
Fees on the Ethereum network and bitcoin miners’ revenues have approached their lows
ETH is experiencing inflation as a result of lower coin burns, and miner stocks are showing an outperformance in bitcoin returns
The fourth halving took place on April 20 and reduced the reward to 3125 BTC. The departure of inefficient miners is probably being delayed in this cycle.
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