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BTC $96,420 +2.34% ETH $3,280 +1.82% SOL $185.40 -0.92% BNB $642.50 +0.45% XRP $2.18 +3.12% DOGE $0.082 -1.50% ADA $1.05 +0.80% AVAX $42.10 +1.15%
08/29/2024

Bitcoin Hashprice Drop Echoes the Conditions That Preceded BTC's March 2020 Price Bottom

Bitcoin's hashprice, compared against BTC price action, is echoing the conditions that led to an all-time high breakout in 2020. Bitcoin BTC tickers down $58,965 is printing a "new buying opportunity" as miners face profitability headwinds. In an Aug. 30 Quicktake blog post, onchain analytics platform CryptoQuant argued that BTC price action has now come close to touching a long-term low. Hashprice comparison suggests BTC price is "near the bottom" Long-term Bitcoin indicators

Bitcoin Hashprice Drop Echoes the Conditions That Preceded BTC's March 2020 Price Bottom

Bitcoin's hashprice, compared against BTC price action, is echoing the conditions that led to an all-time high breakout in 2020.

Bitcoin BTC tickers down $58,965 is printing a "new buying opportunity" as miners face profitability headwinds.

In an Aug. 30 Quicktake blog post, onchain analytics platform CryptoQuant argued that BTC price action has now come close to touching a long-term low.

Hashprice comparison suggests BTC price is "near the bottom"

Long-term Bitcoin indicators continue to reinforce the bullish narrative this month — even as both miners and hodlers feel the squeeze.

Miners are still struggling with post-halving profitability, and the latest data shows their hashprice has become nearly unfavorable.

Designed to measure a miner's cost per terahash, hashprice is currently sitting at very depressed levels. CryptoQuant shows that historically, low hashprice levels have appeared concurrently with low BTC prices — but were typically followed by a sharp breakout.

"The highlighted sections of the chart (blue boxes) indicate periods when Hash Price dropped to lower levels, corresponding to times when Bitcoin's price was also at or near its lows," analyst Woo Mink-yu explained alongside an illustrative chart.

"History shows that these periods of low Hash Price have coincided with Bitcoin price bottoms, suggesting that the current low Hash Price may indicate that Bitcoin's price is near a bottom."

BTC/USD vs. Bitcoin hashprice (screenshot). Source: CryptoQuant

The most recent comparable period occurred in the wake of the global COVID-19 market crash in 2020 and extended through that year's halving event.

Bitcoin miners return to accumulation

Cointelegraph previously reported that outflows from known miner wallets had declined in July.

Related: Bitcoin mining CEO targets hashrate contracts to offset rising costs

More recently, CryptoQuant data confirmed that miners' BTC reserve balances have actually increased, currently standing at 1,815,832 BTC.

Bitcoin miner wallet reserves. Source: CryptoQuant

This week, mining difficulty increased roughly 3%, pushing the metric close to its all-time high of 90.66 million, according to monitoring source BTC.com.

Earlier this month, CryptoQuant CEO Ki Young Ju suggested that the broader picture for U.S. mining is one of resilience.

"Miner capitulation is nearly over, with hashrate approaching ATH," he wrote on X, referencing post-halving events flagged by the Hash Ribbons indicator.

"U.S. mining cost is ~$43K per BTC, so hashrate may stabilize unless prices drop below that level."