Bitcoin network’s hashrate reached a new all-time high at 83 exahashes. Early in the year, Bitcoin network’s hashrate was around 35 exahashes, showing an increase of 137% over a period of eight months.
In mid-2020, the Bitcoin blockchain network is expected to undergo a mechanism called block reward cut halving, which would reduce the revenue received by BTC miners by 50%.
The halving event substantially decreases the amount of BTC extracted by miners. These cryptocurrencies are placed in the market through exchanges and over-the-counter (OTC) transactions, which puts bearish pressure on BTC price. Historically, the reduction by half of the network’s block rewards was a fundamental catalyst for the cryptocurrency’s price trend in the medium and long-term by decreasing the BTC issuance rate (and thus decreasing the inflation of the offer).
It should be noted that halving also tends to reduce the overall hashrate of a proof-of-work (PoW) network, in line with lower mining revenues. This can make BTC less safe from 51% of attacks.
The increase in Bitcoin network’s hashrate before its halving can show that a growing number of miners intend to extract as much BTC as possible before mid-2020, anticipating the dominant cryptocurrency’s recovery in price.
In July, BKCM founder Brian Kelly stated that many miners have acquired enough capital to finance the next 12 months of operations, to keep the BTC that they extract during 2019 and the first half of 2020.
Kelly talked to miners worldwide, many of who say to have sold enough Bitcoin to spend next year or so. They also explained that they will accumulate Bitcoin, which they are not planning to sell, since the supply of Bitcoin will be cut in half. This is a really simple economy, with much demand but little supply, in which the price increasingly grows.
If miners continue conducting their transactions without selling BTC in exchanges or OTC markets to cover their expenses, it means that they anticipate that Bitcoin price will have a good performance in the medium and long term, despite the recent setback.
For the sixth time this quarter, the price of Bitcoin has fallen below US $10,000, testing a support range between US $9,400 to US $9,700. Several technical analysts said that as the support range for BTC weakens, there is an increasing possibility of BTC testing a stronger support range around US $8,000 in the short term.
Technical analyst Josh Rager reported that Bitcoin price currently remains above the previous low at the daily close. However, if the price collapses, it will go to US $8.7ks. After that, it will go to US $8k, but everyone’s interest in it will make it bounce to or surpass that price. It is required to recover more than US $10,100 so that it will become bullish.
It remains uncertain whether the launch of Bakkt, a physically delivered Bitcoin futures contract, on September 23rd this year, could reverse BTC’s short-term disadvantage, given the weakness that the asset has shown since early August against the US dollar.
Bitcoin, currently in the 1st place by market capitalization, has risen 0.12% in the last few days. At the time of writing this note, BTC has a market capitalization of US $171.93B with a 24-hour volume of US $11.63B.
It is essential that users follow the current status of cryptocurrencies, especially that of Bitcoin. The cryptocurrency par excellence is known for never sleeping, neither must cryptocurrency investors.
By Willmen Blanco