Technology

Bitcoin price could rise as lower indicators signal warm winter for cryptocurrencies

The price of bitcoin has dropped a lot this year, as has the entire crypto market. The largest cryptocurrency on the market has lost over 60% of its value since its all-time high of nearly $69,000 last November.

Bitcoin investors have been faced with a dilemma this year as the price of the coin continues to experience significant price fluctuations. The cryptocurrency market lost almost $2 trillion of its value, which was caused by the sudden crash of the TerraUSD stablecoin, which caused its sister token, Luna, to lose all its value.

The bearish trend, led by bitcoin, continued, dragging other currencies like ETH, bitcoin cash, Solana, Cardano, XRP, BNB Coin and many more with it.

Analysts, however, are predicting a big price breakout for bitcoin if recent technical signals are to be believed.

Some analysts point to the current hash rate, which is a measure of the computing power used to mine bitcoin, as the main indicator of impending price increases.

Many bitcoin miners during the market downturn were discouraged by the low price of bitcoins and considered it unprofitable to continue mining.

The average 30-day hash rate (monthly average) has dropped over 7% since mid-May, when the market really started to decline, and at one point even dropped 10%.

Charles Edwards, founder of the quantitative crypto fund Capriole Investments, who coined the term “hash tapes” in 2019 to identify buying opportunities for bitcoin, said that as more miners leave the market, the difficulty of bitcoin mining decreases because there is less competition. .

Decreased competition leaves room for more miners to re-enter the market, which could lead to a recovery.

According to the Edwards method, the worst miner capitulation usually ends when the 30-day moving average of the hash rate crosses the 60-day moving average again.

However, Edwards added that when this happens at the same time as bitcoin’s 10-day moving average price crosses over the 20-day moving average price, the price of bitcoin will see flashes of a “buy signal”.

CoinShares head of research James Butterfill also stated that “Bitcoin prices fell 74% from peak to trough at one point, closely matching the 83% decline seen in 2018 and should be considered in the context of what the market significantly larger and now has a much broader investor base than in 2018.”

According to Yui Hasegawa, a cryptocurrency market analyst at Japanese cryptocurrency exchange Bitbank, the biggest hurdle currently facing the cryptocurrency market is uncertainty about the Fed’s monetary policy and whether the central bank will ease the pace of interest rate hikes.

He added that any slowdown in the pace of rate increases could have a positive impact on the revival of the cryptocurrency market.

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