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Bitcoin Hash Rate Hits a New Milestone as the Crypto Struggles to Break Past $12,000: A Bullish Rally Incoming?

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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.

Bitcoin Hash Rate

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 price

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. 

Bitcoin mining report: BTC records highest mining difficulty since inception

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These are very uncertain times for cryptocurrencies led by the Grandmaster of crypto, Bitcoin, on the market. Together with the entire cryptocurrency market, Bitcoin has been facing some levels of volatility as the markets lose their upward momentum that has been witnessed over the past several weeks leading to the cryptocurrency markets experiencing trends of sideways trading.

Despite Bitcoin’s recent price depreciation into the 7,000 US dollar region that appears to put its bullish momentum under threat, analysts are now arguing that Bitcoin might further record dismal prices as low as 5,400 US dollars before the whales surrender their control at full.

Following what can only be described as a winter period in the cryptocurrency market, Bitcoin and other cryptocurrencies seem to have endured the winter to start recording recovery trends that are gathering pace quickly.

For instance, a couple of weeks ago, a new price surge propelled Bitcoin prices towards the 9,000 US dollar mark, which is so far the highest level this year and the best rate since May 2018. Even though Bitcoin’s price has retreated below the 8,800 US dollar mark by the time of writing, its prices are still 137 percent higher than what it was at the beginning of the year.

These recovery trends have far-reaching implications for both cryptocurrency miners and traders who earn money from offering solutions to mathematical problems to confirm Bitcoin’s platform transactions.

Bitcoin Recovery Efforts Propel it to the Upper 7,000 USD Region as the Selling Craze Kicks In

At the time of writing, Bitcoin is exchanging at about 7,900 US dollars, a slight increase from its 24-hour high of about 7,940 US dollars that was set earlier today.

Looking at the trading period of Bitcoin for the past one week, BTC has been wavering between the lower 7,000 US dollar region and the upper 8,000 US dollar region, a trend that is quickly taking shape as Bitcoin’s trading range. If BTC continues recording such trends, the new direction might form a new persistent pattern of consolidation.

More important to note, looking at the long-term perspective, is, Bitcoin might not be out of the woods just yet as it appears it could record a significant fall soon before surging.

According to a renowned cryptocurrency trader, Josh Rager, Bitcoin could drop further to fetch dismal prices such as 5,400 US dollar before falling into a long-term price surge trend, which means that the market should brace itself for further losses.

Through his Twitter handle, Josh Rager tweeted:

Bitcoin (BTC)’s New All-time Mining Difficulty

When looking beyond the fluctuating and somewhat the unpredictable price swings, it seems another indicator is worth noting. The Bitcoin mining difficulty has recorded a new all-time high following a shocking 11.3 percent increase.

While sometimes it may be assumed that bitcoin miners make the digital coin out of thin air, that can only be perceived as being further from the truth. Miners invest heavily in high-performing machines and have to foot substantial electricity bills as the mining process is a power-intensive one. That is why miners find themselves under a lot of pressure during crypto winters that are also known as a year-long bear market.

But contrary to what many would tend to think, recording a new record in mining difficulty means the Bitcoin platform is now more secure and stable than it has ever been.

What the term difficulty means is the ease at which Bitcoin miners use to solve the cryptographic problems required to mine new blocks on the BTC platform. High mining difficulty is translated to be an indicator of either a current or an upcoming bullish movement in the value action of Bitcoin against the US dollar.

Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.

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