Recent technical signals suggest that bitcoin might be too be due to hack Soon, something that’s sure to make investors everywhere scream with glee.
Bitcoin may be back soon
The cryptocurrency space has been rather poor lately, with bitcoin – the world’s number one digital currency by market capitalization – leading the way into a recession. BTC has crashed more than 60 percent from its all-time high in November 2021 at $68,000, and the crypto space has lost more than $2 trillion in valuation due to the number of large, mainstream coins choosing to follow in BTC’s footsteps.
But the current hash rate – or the number used to show how much bitcoin has been mined – suggests that things could turn for the coin. Matthew Kimmel – Digital Asset Analyst at Coin Shares – recently stated in an interview:
Historically, capitulation in the mining market has tended to align strongly with overall market bottoms.
With this data in mind, Charles Edwards – founder of quantitative crypto fund Capriole Investments – came up with the idea of so-called “hash streaks” in 2019 as a way to help investors understand when the good buys points for bitcoin will arrive.
Edwards has since come out to state that now is a great time to buy bitcoin given the price drops. These purchases should eventually bring Bitcoin back from the depths and ensure that the coin sees growth that leads the cryptocurrency in a more positive direction.
These “compromises” are painful events for miners within the ecosystem.
The concessions he’s talking about relate to miners shutting down their rigs and other equipment during downtimes like these to save money with prices out the window. However, when we use the methods introduced by Edwards, it appears that the worst of these compromises are over, which means that miners may become more active soon. This could bring bitcoin back out of the shadows.
Edwards discussed his points further, commenting:
Hash Ribbons were created in 2019 as a way to determine when a major bitcoin mining capitulation might occur, once recovery from these events resumes, they usually mark major bitcoin price lows. Historically, these have been great times to allocate bitcoin, with incredible returns.
This could be a powerful predictor
Kimmell also feels that the Bitcoin recovery may have already begun. He said:
I find that this metric should not be relied solely on to make an investment decision, but it can certainly be useful if combined with a host of other metrics and qualitative evidence… It’s impossible to say if we’ve come to a complete capitulation. However, there is evidence that we are in the phase of the mining cycle where capitulation occurs most often. Second, if previous cycles hold predictive power, then yes. The bitcoin price steadily exceeding the hash rate is likely to precede a period of high price growth.
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