Bitcoin Price and Hashrate Differences Could Trigger Rally

Todaysgist, News – The divergence between the price of bitcoin (BTC) and the hashrate, or total computing power of the network, has the potential to lead to the largest price rally in the digital asset. Historically, this divergence has only happened a handful of times in the past three years.

In some cases, bitcoin prices have hit local bottoms during these events, followed by rallies as the market catches up. hashrate. The Bitcoin network hashrate goes up and down, depending on how many miners have their mining computers online to validate transactions.

In line with this pattern, bitcoin has shown signs of recovery. It has risen by around $9,000 since its local low on September 6, 2024, representing a 15 percent increase in value.

Quoting the page CoindeskMonday (23/9/2024), the divergence between the price of bitcoin (BTC) and its hash rate began to form in July, then continued into early September. When the network’s computing power reached an all-time high of 693 exahashes per second (EH/s) on a seven-day moving average, while the price of bitcoin approached USD 54,000.

A significant factor contributing to the recent surge in hashrate is the activity of publicly traded mining companies. Before the halving, the hashrate peaked at 650 EH/s and dropped to 550 EH/s in June. This is because less efficient miners are leaving the network due to higher competition.

But it has now returned to pre-halving levels, as publicly traded and well-capitalized miners have increased their market share by increasing their computing power.

In fact, data from 16 publicly traded companies shows they are nearing a 23 percent market share in production, the highest since at least January 2023, according to industry journal TheMinerMag. It’s likely that publicly traded miners will continue to capture a larger share of the hashrate over time, as they compete to remain profitable post-halving.

September has historically been dubbed a bearish month for bitcoin, with historical data from Coinglass showing an average price decline of 4 percent. However, this year has bucked that trend, with bitcoin posting a 7 percent gain so far.

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