Bitcoin Hash Rate Surges as Miner Capitulation Ends

Bitcoin’s price trajectory is caught in a tug-of-war between bullish and bearish forces, according to crypto analyst Willy Woo. Woo points to positive signals like the end of miner capitulation and a rebounding hash rate, but warns of potential headwinds from increased exchange inflows and the launch of Ethereum ETFs.

Miners capitulation is over, it’s one of the most reliable bullish indicators.

Hash rate is recovering, the price and hash rate bottom coincided with upgrades to next gen hardware hitting the network.

M66s went live last week.

S21 Pros this week.

Hash rate set to scream. pic.twitter.com/By59bao5cN

— Willy Woo (@woonomic) July 23, 2024

Willy observed that the conclusion of miner capitulation is the initial bullish signal, often serving as a reliable indicator of favorable price movement. The recent rebound in Bitcoin’s hash rate, coinciding with the introduction of new hardware upgrades, further strengthens this optimism.

Recent activations of next-generation mining hardware, including the M66s, which went live last week, and S21 Pros, this week, have further supported this trend. Historical data suggests that hash rate recovery is often followed by months of bullish performance, a pattern that is currently unfolding.

Willy noted that the Puell Multiple is a crucial indicator, a metric that assesses miners’ profitability relative to historical revenues. Based on his post, this measure highlights two macro conditions, profitability at historical lows and the impact of Bitcoin halving, which cuts miner earnings by 50%. Currently, the market is experiencing the latter, signaling a potential shift toward increased miner profitability.

Additionally, concerns have arisen due to recent bearish signals. An increase in Bitcoin flowing into spot exchanges could indicate potential selling pressure. Specifically, 50,000 BTC from MtGox being transferred to Kraken might be contributing to market unease.

Moreover, he notes that the launch of the Ethereum spot ETF poses a risk. Speculation suggests that capital from Bitcoin ETFs might rotate into the new Ethereum ETF, potentially impacting Bitcoin’s price, which is currently trading at $66,637.35.
Willy Woo predicts that Bitcoin needs to surpass $73,000 to trigger a short squeeze, which could then push the price to $77,000 or more. This potential for price discovery illustrates the ongoing battle between demand and supply in the Bitcoin market.

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