journalist
Posted: November 19, 2023
- Bitcoin’s hash rate hit a seven-day high, putting BTC at risk of further decline.
- Shorts can be unwound if CLLD rises.
Bitcoins [BTC] According to data from AMBCrypto, the hashrate has reached its highest level in the last seven days observed by CoinWarz. At the time of writing, the king coin’s hashrate was 564.88 exahash per second (EH/s).
Source: CoinWarz
Bitcoin’s hashrate gives an estimate of the computing power miners use to process transactions on the blockchain. This process is sometimes complex, but miners make sure to confirm the legitimacy of a transaction before adding it to the blockchain.
A high hashrate is risky for BTC
Gigisulivan, a writer at CryptoQuant, commented on the hashrate increase and how it could impact the price of BTC. According to Gigisulivan, who also serves as an on-chain analyst, BTC could be on the verge of falling to $31,500 due to the increase in hash rate.
To support his point, the analyst compared the current situation situation with the state of BTC around September 15th. It was also around this time that the hash rate reached a new high. During this period, Bitcoin jumped to $26,700.
Regarding the editorial situation, Gigisulivan noted:
“Important to note that two weeks ago we set another new high in hashrate, which is within the usual time frame and pump-before-dump range.The most likely pullback target is between 30 and 31.5k.”
At press time, the price of BTC was $36,643. This value, when compared to altcoin prices over the last 24 hours, showed that Bitcoin Dominance lost weight. To determine how the king coin might perform, AMBCrypto evaluated the liquidation level data provided by HyblockCapital.
By definition, Liquidation levels are potential price levels that could result in the loss of a trader’s position. A look at the data showed that BTC could decline sharply at some point.
Source: HyblockCapital
Short-term holders should beware
However, if the Cumulative Liq Level Delta (CLLD) rises, short selling can be liquidated. This is because the trend could reverse to the bullish side. But at the time of this writing, traders were opening short positions for BTC with an average leverage of 25x.
Additionally, mining-related metrics such as the market cap to thermocap ratio provided some information about the value of BTC. The market cap to thermocap ratio can be used to assess whether the asset’s price is currently trading at a premium.
To obtain this value, Glassnode also takes into account the miners’ total security expenditure. Historically, there has been a high market cap to thermocap ratio signaled that Bitcoin is near the peak of a market cycle.
To read Bitcoins [BTC] Price prediction 2023-2024
If the ratio is low, it means it is a relatively good time to buy. At the time of this writing, the market cap to Thermocap ratio was 0.00000065.
Source: Glassnode
For short term ownerBTC’s value above $36,000 suggested that buying the coin and profiting from it could be risky at press time. Meanwhile, long-term holders had the opportunity to accumulate BTC at a discount regardless of the current direction.
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