Hash Rate Bitcoin Price Dips

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Mimesis Capital: Inside The Event Horizon, Report #17

Why Hash Ribbons Predict Local Bitcoin Bottoms So Accurately

Theory: When the bitcoin price hits a certain level, selling pressure starts to exponentially disappear.

Bitcoin mining is a ruthless industry. Over the long run only the most efficient mining firms will survive.

The tendency for the mining industry to attract large amounts of competition combined with simplicity and beauty of the Bitcoin protocol could give us a method to predict local “price floors” for bitcoin.

Halvings

Blockware Solutions, a bitcoin mining firm, released an in-depth report last year on how halvings directly affect miners and how much sell pressure is removed from the market post-halving.

Take a look at the entire report to get a good idea of how they reached their specific conclusions, but they estimated that USD-denominated forced miner selling would fall 70% after the halving with no change in price.

This was likely a major catalyst for the current bull run.

How Does This Work?

Sell pressure drops due to miner capitulation.

Directly after a halving miner capitulation occurs because the block subsidy is cut in half, but the operating expenses of mining firms do not change.



Source link Bitcoin Magazine

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