Bitcoin Price Holds Below $12K Even as Hashrate Hits All-Time High
Bitcoin remains in consolidation below a critical resistance despite hashrate reaching record highs over the weekend.
Data from Glassnode shows the seven-day average for bitcoin’s hashrate – the computing power dedicated to mining blocks – rose to a record high of 129.03 exahashes per second (EH/s) over the weekend.
Bitcoin’s July rally has stalled near $12,000, making the psychological level a resistance to beat for the bulls. It was sidelining near $11,900 at press time.
But some argue that an increasing hashrate is a bullish price signal.
Earlier this year, Jeremy Britton, CEO of Boston Trading Co. told Finance Magnates rising hashrate forced miners to hoard rather than sell newly mined coins, reducing downwards pressure and raising the price floor.
But price increases don’t always follow from higher hashrates, according to Philip Gradwell, an economist at the blockchain intelligence firm Chainalysis.
“Miners may be better at predicting the future price, but that doesn’t really cause the prices to go up,” Gradwell told CoinDesk in a Telegram chat on Monday.
A direct correlation between the hash rate and the price has not been seen before – bitcoin's price fell 30% in the second half of 2019 even though the hashrate rose 64% to 97 EH/s.
Stack Fund co-founder and COO Matthew Dibb told CoinDesk miners may be scaling up their capacity, ergo hashrate, in anticipation of a rising bitcoin price, but didn’t think there was actually an established causal link between the two.
Also read: Marathon Signs New $23M Contract With Bitmain for 10,500 Bitcoin Mining Rigs
