Bitcoin Price and Hashrate Divergence May Set the Scene for a Potential Rally, Historical Data Shows

A
divergence
between
bitcoin

(BTC)
price
and
its
hashrate
or
network’s
total
computing
power
could
potentially
point
towards
a
rally
in
the
price
of
the
largest
digital
asset.

Historically,
these
divergences
have
occurred
only
a
few
times
in
the
past
three
years.
In
some
cases,
bitcoin
prices
have
reached
a
local
bottom
during
these
events,
followed
by
a
rally
as
the
market
catches
up
with
the
rising
hash
rate.
Bitcoin
network’s
hashrates
rise
and
fall
depending
on
how
many
miners
have
their
mining
computers
online
to
validate
transactions.

Consistent
with
this
pattern,
bitcoin
has
already
shown
signs
of
recovery,
gaining
about
$9,000
since
the
local
bottom
on
Sept.
6,
representing
a
15%
increase
in
value.
This
divergence
between
bitcoin’s

(BTC)
price
and
its
hash
rate
started
to
shape
up
in
July
and
then
persisted
into
early
September,
when
the
computing
power
of
the
network
reached
an
all-time
high
of
693
exahashes
per
second
(EH/s)
on
a
seven-day
moving
average,
while
bitcoin’s
price
was
near
$54,000.

A
significant
factor
contributing
to
the
recent
surge
in
hash
rate
is
the
activity
of
publicly
traded
mining
companies.
Before
the
halving
–
where
bitcoin
rewards
get
cut
in
half
–
the
hash
rate
peaked
at
650
EH/s
and
dropped
to
550
EH/s
in
June,
as
less
efficient
miners
exited
the
network
due
to
higher
competition.
It
has
now
returned
to
pre-halving
levels
as
publicly
traded
miners
that
are
well-capitalized,
have
increased
their
market
share
by
raising
their
computing
power.

Read
more:



What
Is
the
Bitcoin
Halving

In
fact,
data
from
the
sixteen
public
companies
show
that
they
have
almost
reached
a
23%
market
share
in
production,
the
highest
since
at
least
January
2023,
according
to
the
industry
journal

TheMinerMag.
It
is
likely
that
publicly
traded
miners
will
continue
to
capture
a
larger
share
of
the
hash
rate
over
time
as
they
compete
to
stay
profitable
post-halving.

September
has
historically
been
dubbed
a
bearish
month
for
bitcoin,
with
historical
data
from

Coinglass
indicating
an
average
price
decline
of
4%.
However,
this
year
has
defied
that
trend,
with
bitcoin
posting
a
7%
increase
so
far.
This
counter-seasonal
trend
could
be
indicating
that
due
to
the
lower
bitcoin
price
and
rising
hashrate,
the
price
could
be
playing
catch
up
with
the
hash
rate,
potentially
setting
up
for
another
rally.
Of
course,
there
are
other
market
factors
such
as
interest
rate
decisions
could
also
catalyze
this
price
change.

Additionally,
the
next
difficulty
adjustment,
scheduled
for
Sept.
25
and
projected
to
decrease
by
5%,
could
also
indicate
that
prices
may
be
catching
up.
Blocks
are
currently
being
mined
at
an
average
of
10.5
minutes,
according
to

mempool.space.
This
indicates
a
potential
slowdown
in
the
hash
rate
as
price
plays
catch
up.

Another
factor
that
could
signal
a
potential
rise
in
price
is
what
miners
are
doing
with
their
mined
bitcoin.

Glassnode
data
indicates
that
from
November
2023
to
August
2024,
miners
consistently
sold
bitcoin
to
fund
their
operations
due
to
the
halving,
marking
one
of
the
longest
periods
of
sell
pressure
on
record.

However,
in
the
past
30
days,
miners
began
accumulating
bitcoin
in
their
wallets,
suggesting
that
the
financial
strain
from
the
halving
is
largely
over.
If
miners
are
distributing
less
bitcoin,
this
reduces
the
supply
entering
the
market,
increasing
the
chance
of
potentially
helping
the
price.