Bitcoin (BTC) enthusiasts have a new reason for optimism, thanks to insights from Jamie Coutts, the chief crypto analyst at Real Vision. Coutts has highlighted a significant indicator suggesting that Bitcoin might be on the verge of a bullish reversal, sparking discussions about the potential for Bitcoin to once again reach $70,000.
Slowing Decline in Bitcoin Hashrate
In a recent X (formerly Twitter) post, Coutts observed that the decline in Bitcoin’s hash rate is slowing. Historically, this trend has often signaled a bottoming out and subsequent reversal of bearish trends, particularly following Bitcoin’s halving events. Coutts emphasized that for a bullish reversal to take hold, the current downtrend must stabilize.
The difference between the 30- and 90-day moving averages of Bitcoin’s hash rate aligns with previous periods of hash rate contraction. Unlike the severe post-2020 halving decline, the current slowdown indicates that miners’ capitulation could be nearing its end. When inefficient miners exit the market and more efficient ones take their place, the overall health of the mining ecosystem improves.
Insights from Industry Experts
Ki Young Ju, CEO of CryptoQuant, has offered further insights into the end of miners’ capitulation. According to Ju, this phase typically concludes when the daily average mined value reaches 40% of the yearly average. Currently, it stands at 72%, suggesting that while there may still be some time before miners stop offloading their reserves, the process is ongoing.
Ju advised market participants to prepare for a relatively quiet market over the next two to three months, suggesting a long-term bullish outlook while avoiding excessive risks. Other analysts, like Mikybull Crypto, also maintain that Bitcoin’s long-term prospects are positive, even though it remains far from its previous bull market peaks.
Recovering from Supply Overhang
Coutts also addressed the market’s recovery from a supply overhang caused by significant selling pressure. This pressure resulted from the German government’s sale of nearly 50,000 BTC, which temporarily suppressed Bitcoin’s price. However, Coutts sees potential benefits from the redistribution of these coins, as well as those from the Mt. Gox reserves.
By spreading these coins across a wider array of holders, the Bitcoin network could become more robust, ultimately benefiting the cryptocurrency. This redistribution could alleviate the supply overhang and support a price increase.
Current Market Status
As of now, Bitcoin is trading at approximately $58,300, reflecting a 2% increase in the past 24 hours, according to CoinMarketCap. The slowing hash rate decline, combined with expert insights and the ongoing recovery from supply overhang, suggests a bullish outlook for Bitcoin. While reaching $70,000 may take time, these indicators provide hope that such a milestone is achievable.
Investors should stay informed and cautious, balancing optimism with prudent risk management. The crypto market is known for its volatility, but these positive indicators suggest a promising future for Bitcoin.
