Bitcoin has been having difficulty breaking past $12,000 for about three weeks now since it broke past $10,000 on July 27. Could an enhanced bitcoin hashrate signal increase the price?
Although the crypto has been struggling to surpass $12,000, the pressure building below this level continues to accumulate, with the seven-day average bitcoin hash rate hitting a new all-time high.
According to data by Blockchain.com, bitcoin’s seven-day average hash rate reached 129.075 TeraHash/second (TH/s), surpassing the previous all-time high of 126.91 TH/s reached on July 29.
Increased bitcoin hash rate could signal an imminent bullish rally
Notably, hash rate refers to an estimate of the magnitude of computing power being utilized on a blockchain at a particular time. Although there is no direct connection between the computing power and the price of a cryptocurrency, some experts consider that an elevated hash rate signals an imminent appreciation in the value of bitcoin.
Simply, an elevated bitcoin hash rate indicates an entrance of new bitcoin miners or addition of new mining rigs to the bitcoin network. The entry of new miners or the addition of more equipment into the network shows that miners are confident in making profits at least.
Furthermore, higher computing power could also spell that the available miners are more confident in the profitability of the crypto. That is to say, the individuals or organizations investing their resources to put hash power on the network; are of the belief that their efforts will be rewarded, hence they continue to invest more.
Bitcoin price overview
The price of bitcoin surged past $12,000 on two occasions this month, failing to maintain and dropping back below. The BTC price action has constantly faced resistance at $12,000, resting between $11,700-$11,900 during the weekend.
Bitcoin has started the week at the higher end of its price range, closer to the $12,000 mark. The $12,000 price level has caused traders problems for the past couple of weeks as it refuses to turn into support. Furthermore, the Crypto Fear & Greed Index, indicates increased greed among investors. On August 17, the index sits just three points shy it’s all-time high of 87/100 from June 2019.