The Hash Ribbon model, which has been the industry standard for generating an estimate of Bitcoin value using a useful metric called “Hash power”, has failed for the first time. This is due to a combination of factors that have led us to believe there is little chance of this changing in the near future.
In particular, it’s highly likely that many of the mining machines that generate 0.06 USD/kWh electricity have stopped mining. This is because Bitcoin’s difficulty level has risen sharply in recent months, leaving many miners unable to turn a profit with their current setup. As a result, many miners have abandoned their rigs altogether, leading to a significant decrease in the overall hash power of the network.
While it is unclear whether the bottom has truly been reached yet, there are signs that we may be nearing a turning point. The sharp decline in mining power could be seen as a bearish indicator signaling that the market is close to bottoming out, as many miners give up on their operations and exit the industry. However, with prices expected to remain low for the foreseeable future, we may see even more pain than what was previously experienced in the past. Only time will tell how this evolving situation plays out.
What does technicals suggest about BTC price?
Based on the analysis of various technical indicators such as support levels, momentum indicators, and price patterns, it appears that there is little indication that the price of BTC will recover anytime soon. Many market analysts believe that the current bear market may persist for some time, with prices potentially bottoming out in the $5,000 to $10,000 range.
However, there are some positive signs that suggest a recovery may be on the horizon. For example, many analysts have pointed to the sharp drop in hash rate as a potential bullish indicator, suggesting that we could see a reversal of price trends as miners begin to exit this highly-competitive market. Additionally, some believe that institutional investment could help to drive up the price in the long-term, with many institutions beginning to explore opportunities in this space.
Overall, there are a number of factors that will play a role in determining whether or not BTC can emerge from this bear market and begin to recover. While it remains unclear exactly when we can expect an upward movement, many analysts remain optimistic that we can see a resurgence in BTC prices over the coming months. Whatever happens, only time will tell how this evolving market landscape unfolds.
Conclusion
Although the future of Bitcoin remains uncertain, there are a number of factors that will likely play a role in determining its trajectory. From the sharp drop in mining power to increasing institutional investment, there are many potential drivers that could influence BTC prices in the near future. However, only time will tell how this volatile market landscape unfolds and what impact it will have on the future of Bitcoin.
