For many Bitcoin investors, an increase in Bitcoin’s hashrate is a positive sign for the network. Analysts also attach the metrics to a bullish signal. However, a key figure in the cryptocurrency market is citing bearish indicators to watch out for shortly after Bitcoin’s hash rate hit a new all-time high.
In a recent analysis from Cryptoquant, analyst GigiSulivan argues that, unlike many beliefs, Bitcoin’s hashrate spike is hardly ever a bullish sign, as Bitcoin has often ended up in a bearish state after the hashrate upsurge.
Backing up his claims, the analyst points back to 2021 and 2022, explaining that, as reflected on the charts, a selloff followed every time Bitcoin’s hash rate attained a new all-time high.
While maintaining that 2023 might be an anomaly, he gives reasons why Bitcoin might follow the same patterns as the previous years.
“How far can we expect Bitcoin’s price to go down? Based on last year’s 7 occurrences (there were 2 occurrences where the sell off happened after the second consecutive ATH): average move down was around 19.5%, minimum move down 12.5%, largest move down 37%, max move up before a sell off was around 11%.” He explained in the recent analysis.
According to the analyst, this would mean that Bitcoin could go up to $25,500 before it declines to the $18,400 price level. After the dip, he targets $14,500 as Bitcoin’s expected all-time low and $20,100 as Bitcoin’s minimum peak price.
The gaps between clusters of stronger miner activity and hashrate reaching new ATHs in quick succession is another notable point the analyst mentions. He claims that it meant mostly within nine days, a drop in price levels was recorded after the first all-time high in a cluster.
“That brings us to Fri next week after the FOMC meeting and crucial decision on interest rates and future outlook, so highly anticipated by risk on markets pricing in a soft landing and rates cut in 2023. Based on the data present, we should expect bad news for the stock and crypto market unless this time is different.” He further explained.
Meanwhile, per a recent report from ZyCrypto, other figures like CryptoQuant’s CEO Ki Yung Ju predict that Bitcoin has already entered a bullish phase.