Bitcoin has been struggling lately, but there’s a glimmer of hope. A key indicator is suggesting that the worst might be over, and a rebound could be on the horizon.
Miners Are Holding On
One of the most important things to watch in the Bitcoin market is the hash rate, which basically measures how much computing power is being used to mine new coins. Recently, the hash rate has been declining, which means miners are giving up. But there’s a twist: the decline is slowing down
. This is a good sign, as it suggests that miners are starting to hold on, and the worst of the sell-off might be over.
This is a common pattern, according to crypto analyst Jamie Coutts. He says that a slowdown in the hash rate usually happens before Bitcoin bottoms out and starts to climb again.
Miners Need to Capitulate
Of course, the market isn’t out of the woods yet. There’s still a lot of pressure on miners, and some of them will likely have to give up and sell their Bitcoin. But once that happens, the market should start to recover.
Crypto expert Willy Woo agrees, saying that the market will bounce back when “weak miners die, and the hash rate recovers.” He explains that inefficient miners will be forced to shut down, while others will have to upgrade their equipment.
A Long Road to Recovery
It’s going to take some time for the market to fully recover. Cryptoquant CEO Ki Young Ju says that miners usually stop selling when the daily average mined value is about 40% of the yearly average. Right now, it’s at 72%, so it could be a few more months before miners calm down.
Supply Overhang Still a Problem
Another issue is the supply overhang
. This is when there’s too much Bitcoin available for sale, which puts downward pressure on the price. This is partly due to the German government selling off a huge chunk of its Bitcoin holdings.
However, Coutts thinks this supply overhang could actually be a good thing in the long run. He believes that distributing these coins to more people will help grow the Bitcoin network and make it even stronger.
Looking Ahead
Overall, the situation for Bitcoin is still uncertain. There are some positive signs, but it’s still too early to say for sure that a bull market is coming. Analysts recommend staying bullish in the long term, but avoiding excessive risk for now.
