- Any further rally and subsequent decline in the BTC hashrate will lead to a drop in the price.
- The Bitcoin market is not in the accumulation zone yet.
It is currently trading at the December 2020 price level, and holder of the leading bitcoin [BTC]It may not be clear yet as on-chain valuations point to further declines in BTC price as we prepare to enter the 2023 trading year.
0.45x drop if BTC falls to Ethereum’s market cap?
While the ongoing decline in the BTC hash rate is no longer news, its negative impact on BTC prices remains. A decrease in the BTC hash rate often indicates that miners on the BTC network have stopped mining because it is no longer economically feasible to do so.
CryptoQuant Analyst Sun Moon encryption He evaluated the historical performance of the BTC hash rate and found that every time the hash rate of the 30-day moving average (30 EMA) peaked before falling, the BTC price followed suit.
Recently, after a prolonged decline in BTC hashrate, it peaked at 260MH on November 5th. This sent the price of BTC higher as the coin-king temporarily traded above $20,000.
However, the rapid decline in the hash rate and the FTX disaster culminated in a significant drop in the BTC price as it ended the month trading at $17,000.
According to Crypto sunmoon, “In the past, when the hash rate (30EMA) reached two peaks and fell, bitcoin prices also fell twice. This indicates that the next rise in BTC hash, which is followed by a decline, will also lead to a further decline in the price of BTC.
Sharing a similar view, another CryptoQuant analyst Qudosivar He evaluated the BTC volume and accumulation trend and concluded that a further decline in the value of the king coin was imminent.
According to Ghoddusifar, crypto assets see an increase in transaction volume when buying activity is high. But Gudosivar said that “examination of the current price range does not show a large volume of transactions on the stock exchanges.”
Read bitcoins [BTC] Price forecast 2023-2024
He further added:
“If we do not see an increase in the volume of transactions in this range, then we must consider the possibility that we have not yet reached the accumulation range.”
This means that the volume of BTC transactions at its current price level has remained negligible, indicating that the market still needs to reach an accumulation point where buyers usually crowd out sellers.