A reduced hashrate indicates the network is underperforming, but this could also be a sign of a significant short-term price increase for Bitcoin.
Bitcoin's hashrate continues to fall
Bitcoin hashtags are often seen as an indicator of the fundamental network strength of the world's largest cryptocurrency. It is calculated in terahash per second (TH / s) made by the BTC blockchain.
Bitcoin's hashrate has dropped significantly in the past few weeks along with its price decline. Its hashrate has dropped from an all-time peak of 133 million TH / s in early March to 105 million TH / s today. Thus, BTC's hashrate is still down 21%.
This decline occurred when BTC showed technical weaknesses. The recent sell-off of this coin has caused many small-scale miners to stop operations due to no profit.
Hashrate reduction is a bullish sign for BTC
Miners provide the cryptocurrency market with a stable source of selling pressure. They sell BTC to exchange for cash to reinvest in mining. When Bitcoin prices plummeted, mining operations were no longer profitable. Many small miners have to halt their operations, while miners who have the potential, keep BTC mined in the hope of selling at a higher price.
It can be said that the falling hashrate could be a signal that selling pressure from miners will also decrease. Therefore, this is also an opportunity for BTC to adjust in the direction of increasing prices.
Bitcoin's hashrate is likely to fall further in the near future. As the block reward after the upcoming halving event will be cut in half, and technical weaknesses can make BTC mining even more unfavorable.
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According to BeInCrypto