On-chain data shows that Bitcoin hashrate has fallen by more than 20% in the past 24 hours, a sign that could be bearish for the crypto.
Bitcoin Hashrate Drops Over 20% In The Past Day
As noted by a CryptoQuant post, the BTC mining hashrate has fallen severely in the past 24 hours. Such a trend has been mostly bearish for the price of the coin.
The “mining hashrate” is an indicator that shows the total amount of computing power connected to the Bitcoin blockchain network.
Validating nodes on the BTC network, called ‘miners’, requires a lot of computing power to compete with each other to decide who gets to handle the next transaction.
Because of this, a high value of the Bitcoin hashrate can result in fast and efficient network performance. High hashrate values also usually imply that a large number of nodes are connected to the network. This leads to better decentralization of the network and thus to better overall security.
On the other hand, a low value of the hashrate can lead to poor network performance. Security would also be lower as it would be more centralized.
Related literature | deVere CEO: Bitcoin Panic-Sellers Are A Christmas Present For The Rich
Here is a chart showing the trend in the value of this Bitcoin hashrate over the past year:
Looks like the value of the indicator has sharply dropped today | Source: CryptoQuant
As you can see in the chart above, the Bitcoin hashrate has fallen in value by about 20% in the past 24 hours alone.
This hashrate drop comes not long after the indicator fully recovered from China’s mining crackdown and hit a new record.
Historically, high hashrate values have been associated with bullish trends, as such values imply that it is currently profitable to mine on the Bitcoin network, and more miners are attracted to it.
So a drop like that now would mean that it is no longer viable for some miners to operate their facilities, which is why they have chosen to shut down their operations.
Related literature | The debate over toxic Bitcoin maximalism rages on. Both arguments after the jump
Bitcoin miners that go offline so quickly could turn out to be bearish for the cryptocurrency’s price in the long run.
At the time of writing, Bitcoin’s price is hovering around $46k, down 6% over the past seven days. Over the past month, the coin has stacked 22% in losses.
The chart below shows the trend in the price of BTC over the past five days.
The price of BTC seems to have plunged down in the past twenty-four hours | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com