Why Bitcoin’s hashrate has left the door open for bears

bitcoin Hashrate Reaches 7-Day High

On November 19, 2023, bitcoin‘s hashrate reached its highest point in the last seven days, standing at 564.88 Exahash per second (EH/s). This puts BTC at risk of another decline, with potential for shorts to be liquidated if the Cumulative Liq Level Delta (CLLD) spikes.

A High Hashrate is Risky for BTC

Gigisulivan, an author on CryptoQuant, commented on the hike in the hashrate, suggesting that BTC may be on the verge of dropping to $31,500 because of the surge in hashrate. Comparing the current situation with BTC‘s condition around the 15th of September, the analyst warned of a potential pullback target between $30-31.5k.

Short-term Holders Should Watch Out

If the Cumulative Liq Level Delta (CLLD) spikes, shorts may be liquidated, with traders currently opening short positions for BTC with an average leverage of 25x. Mining-related metrics like the Market Cap to Thermocap ratio also suggest that bitcoin is near the top of a market cycle.

Assessing BTC‘s Value

Historically, a high Market Cap to Thermocap ratio has signaled that bitcoin is near the top of a market cycle, whereas a low ratio indicates a relatively good time to buy. As of this writing, the Market Cap to Thermocap ratio was 0.00000065, indicating that for short-term holders, buying and profiting from BTC at press time could be risky.

Long-term holders, on the other hand, had the chance to accumulate BTC at a discount irrespective of the current direction. So, whether it’s a time to buy or wait, the future of bitcoin is uncertain, and it remains a risky investment.

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Overall, the trends in hashrate and trading activity indicate that bitcoin‘s price may experience fluctuations in the coming days, and investors should watch the market closely for potential opportunities or risks.

### News source: eng.ambcrypto.com

By Team