Bitcoin (BTC) has been in a downward trend for over two weeks and is currently trading 13.8% below its all-time high of $73,835 reached on March 14th. Analysts argue that BTC needs to regain its hashrate and shake off its “weak hand.” downtrend.
Independent analyst Willy Woo pointed out that Bitcoin prices will only recover once “weak miners die” and the hashrate recovers.
“This is for the record, as it takes a lot of time for miners to surrender after the halving,” Woo wrote in a post on the X social media platform on June 21.
Miner surrender is a theory that postulates that if Bitcoin falls below a certain price and mining becomes unprofitable, miners will turn off their hardware and sell their coins.
Bitcoin “falling into thin hands” means “inefficient miners running old hardware and high costs are going bankrupt.” Others need to upgrade to more efficient hardware because their profits have been cut in half, the analyst explained. “Both cases force miners to sell BTC to pay for losses or hardware upgrades. ”
“Once that’s done and the selling is over, only the strong are left, and they’re left waiting and waiting for higher prices.”
Woo added that capitulations are taking longer during the current cycle, possibly due to rising profits. “Thanks to the regular inscription.”
He shared the following graph which shows that hashrate recovery is taking longer compared to previous cycles.
By comparison, hashrate took 24 days to recover during the 2017 cycle, and only 8 days in 2020.
“And today. We are still waiting for the miners to die properly. There are still 61 days left.”
The Bitcoin hash rate represents the number of attempts per second to solve the mathematical puzzle that verifies a Bitcoin transaction.
As Bitcoin hashrate rises, more computing power is used, increasing energy costs and lengthening verification and transaction times.
“Bitcoin’s average mining cost is currently $86,668,” fellow analyst Ali Martinez declared in a post on X on June 15.
“Historically, $BTC always surges above average mining costs!”
Additionally, as to when the price of Bitcoin is likely to stop its downward trend, Mr. Anderson said a “wobble” would occur, as fellow analysts say, when “the price plummets, causing less committed traders to sell.”
“The goal is to cause panic and increase sales,” he explained in a June 18 X post.
“After weak traders leave the market, prices often stabilize or rebound as stronger traders buy at lower prices.”
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.