Bitcoin Hash Rate Reaches All-Time High – What’s Next for Prices?
•An observer has noted that Bitcoin hash rate highs tend to signal a sell-off as the upside momentum fades.
•The analyst predicts that prices may rise above the current resistance level at $23,800 to $25,500 before dumping below immediate support lines.
•The observer believes that peaking bitcoin hash rates can diverge with prices, impacting coin valuation.
In late January 2023, the Bitcoin hash rate was recorded at an all-time high of 305 EH/s. This has prompted one observer to note that whenever the Bitcoin hash rate records new highs, prices tend to retrace as the upside momentum fades.
The observer has also noted that expanding Bitcoin prices may encourage more users and mining farms to power on their rigs, further pushing up the hash rate. However, he believes that peaking bitcoin hash rates can diverge with prices, impacting coin valuation.
Based on his theory, the analyst has predicted that prices may rise above the current resistance level at $23,800 to $25,500 before dumping below immediate support lines towards $20,000, or worse.
The observer has based his prediction on CryptoQuant data. He believes that by monitoring the hash rate graph and understanding its relationship with BTC prices, users are better positioned to anticipate potential corrections and capitalize on them.
Hash rate is the total computing power connected to the Bitcoin network. Expanding Bitcoin prices would encourage more users and mining farms to power on their rigs, further pushing up the hash rate. This could lead to strong liquidations that may unwind mining activity, pulling down prices.
At the current pace, a new level of the Bitcoin hash rate will likely be registered if BTC prices continue pumping. Whether it will be a precursor of a sell-off or a bullish sign is yet to be seen. But based on the observer’s analysis, investors should be cautious when prices rise and keep an eye on the hash rate graph to better anticipate potential corrections.