Bitcoin

when

Bitcoin (<a href="https://cointelegraph.com/bitcoin-price" rel="noopener noreferrer nofollow">BTC</a>) has been in a downtrend for over two weeks and now trades 13.8% below its all-time high of $73,835, <a href="https://cointelegraph.com/news/bitcoin-price-new-73-6-k-all-time-high-etfs-eat#:~:text=Data%20from%20Cointelegraph%20Markets%20Pro,dip%20before%20abruptly%20heading%20higher." rel="noopener noreferrer nofollow">reached on March 14</a>. Analysts argue that BTC must recover its hashrate and shake off “weak hands” to end the downtrend.
Independent analyst Willy Woo noted that Bitcoin’s price would only recover when “weak miners die” and the hashrate recovers.
“This one is for the record books as it's taking a lot of time for miner capitulation post-halving,” Woo <a href="https://x.com/woonomic/status/1803926249036710234" target="_blank" rel="noopener noreferrer nofollow">wrote</a> in a June 21 post on the X social media platform.
Miner capitulation is a theory that posits that miners will turn off their hardware and sell their coins if Bitcoin falls below a certain price and mining becomes unprofitable.
When Bitcoin “sheds weak hands,” it means “inefficient miners running old hardware and high costs go into bankruptcy. While others are forced to upgrade hardware that’s more efficient” because their revenues have been halved, the analyst <a href="https://x.com/woonomic/status/1803992160418828525" target="_blank" rel="noopener noreferrer nofollow">explained</a>. “Both cases force miners to sell their BTC to pay for losses or hardware upgrades. ”
<blockquote>
 “After that’s done and the selling has ended, and only the strong remain, and they hodl waiting for higher prices.”
</blockquote>
Woo added that capitulation is taking longer during the current cycle, probably due to profit boosts. “Thanks to ordinal inscriptions.”
He <a href="https://x.com/woonomic/status/1803926249036710234" target="_blank" rel="noopener noreferrer nofollow">shared</a> the following graph showing that the hashrate recovery is taking longer compared to previous cycles.
<figure><img src="https://s3.cointelegraph.com/uploads/2024-06/462f8065-26e6-4e16-83db-e9a97d30f2e3.jpeg">
 <figcaption style="text-align: center;">Bitcoin hashrate recovery. Source: <a href="https://x.com/woonomic/status/1803926249036710234" target="_blank" rel="noopener noreferrer nofollow">Willy Woo</a>
 </figcaption>
</figure>
In comparison, the hashrate took 24 days to recover during the 2017 cycle and only 8 days in 2020.
<blockquote>
 “And today. Still waiting for the miners to properly die. 61 days so far.”
</blockquote>
Bitcoin hashrate refers to the number of attempts made per second to solve the mathematical puzzle that validates Bitcoin transactions.
When the Bitcoin hashrate rises, more computing power is used, which increases energy costs and lengthens verification and transaction times.
“Bitcoin’s average mining cost is currently at $86,668,” <a href="https://x.com/ali_charts/status/1801992810976956449" target="_blank" rel="noopener noreferrer nofollow">declared</a> fellow analyst Ali Martinez in a June 15 post on X.
<blockquote>
 “Historically, $BTC always surges above its average mining cost!”
</blockquote>
<figure><img src="https://s3.cointelegraph.com/uploads/2024-06/d0b0c552-2a3f-4064-81b8-0053eb32316e.png">
 <figcaption style="text-align: center;">Average BTC mining costs. Source: <a href="https://x.com/ali_charts/status/1801992810976956449" target="_blank" rel="noopener noreferrer nofollow">Ali Martinez</a>
 </figcaption>
</figure>
Also weighing in on when the Bitcoin price is likely to end the downtrend is fellow analyst Mr. Anderson who said it will take a “shake out,” which takes place “when price drops sharply, causing less committed traders to sell.’
“The goal is to trigger panic and increased selling,” he <a href="https://x.com/TrueCrypto28/status/1803063060019495157" target="_blank" rel="noopener noreferrer nofollow">explained</a> in a June 18 X post.
<blockquote>
 “After the weaker traders exit, the price often stabilizes or rebounds as stronger traders buy at lower prices.”
</blockquote>
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Bitcoin price bouce will occur when ‘weak hands’ capitulate and hashrate recovers

Cointelegraph

Other articles published on Jun 21, 2024

VanEck’s VBTC ETF Debuts on ASX with Over $1.5M in Trading Volume

Ethereum Co-Founder Vitalik Buterin Joins EDCON 2024 in Tokyo as Japan Emerges as a Web3 Hub

Here’s a List of Top Altcoins That Will Lead the ‘Recovery Rally’

BREAKING: SEC Leaning Towards Not Appealing Ripple Ruling, Citing Strategic Risks

BTC Bulls Expected to Revisit $67,000 Levels: Is Bitcoin Poised for a Massive Rally?

3iQ Seeks Approval for North America's First Solana ETP

Join our free newsletter for daily crypto updates!