Summary:
The Bitcoin hashrate drawdown has dropped to December 2022 levels, signaling a potential price bottom for the asset.
Several indicators like the Bitcoin Exchange Reserve, Miners Position Index, and Bitcoin Miner Reserve suggest low selling pressure, supporting the case for a market bottom.
Miner capitulation is evident, with indicators like the Hash Ribbons flashing a buy signal, suggesting buying opportunities.
The current cycle is seeing a prolonged period of weak miner shutdowns, typically observed in the weeks following a halving event.
Bitcoin miner withdrawals have significantly decreased post-halving, indicating minimized selling pressure from miners and potentially driving Bitcoin's price higher.
The upcoming April 2024 halving event presents challenges for miners, with several companies potentially facing unprofitability due to increased mining costs and reduced rewards.
The Bitcoin hashrate drawdown, a metric reflecting the relative computing power of the Bitcoin network, has fallen to levels last seen in December 2022, following the FTX collapse. This significant decline, currently at -7.6%, suggests a potential price bottom for Bitcoin, supported by other indicators like the Bitcoin Exchange Reserve, Miners Position Index, and Bitcoin Miner Reserve, all indicating low selling pressure.
Recent weeks have witnessed miner capitulation, with indicators like the Hash Ribbons suggesting buying opportunities. This slowdown in network computational power, reflected in the 30-day average sinking below the 60-day average of Bitcoin's hashrate, aligns with market analyst Will Woo's prediction that new highs won't be reached until weak miners are forced to shut down operations. This scenario is typically seen in the weeks following a halving event, but the current cycle seems to be extending it.
Post-halving, Bitcoin miner withdrawals have plummeted by 90%, minimizing selling pressure from miners and potentially fueling Bitcoin's price rise. However, the anticipated April 2024 halving event poses challenges for miners, with several companies like Marathon Digital, Hut8, and Argo Blockchain potentially facing unprofitability due to high mining costs and reduced rewards. If Bitcoin's price falls to $40,000, these major mining companies might be forced to capitulate, highlighting the precarious position of the mining industry post-halving.
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