Bitcoin (BTC) experienced a slightly tough weekend where it hit lows of $42,000. However, the world’s most valuable cryptocurrency is gradually picking up and slightly above the $50,000 mark.
But what caught the attention is not Bitcoin’s struggle to stay above $50,000, but the fact that its indicators are showing signs of upward momentum.
The Bitcoin Hashrate, which usually indicates the next price movement of BTC, has shown a strong recovery in the past six months. The hashrate is used to measure the processing power of the BTC network
Hashrate Picks Up After May’s Record Low
After China’s ban on Bitcoin mining in May 2021, the network hashrate fell by more than 50%. Glassnode revealed that the BTC hashrate recovered from lows in May by over 95%, as it hit 172 Exehash/s today. It currently sits at 4% below its all-time high.
When China announced the ban on cryptocurrencies, several top crypto mining firms decided to turn their attention to other regions that are more regulatory friendly. As a result of the migration, which was the largest in the mining industry, the hashrate fell dramatically, dropping to record lows.
But normalcy is gradually returning, as the overall profitability of leading BTC miners have grown as hashrates improve.
Since May this year, the supply of Bitcoin on top digital exchanges has also dropped significantly. More long-term holders prefer to store their tokens on cold wallets, as noted by Glassnode. During the period, there was a significant increase in the number of Bitcoin inflows in crypto exchanges.
However, while the inflows in May saw up to 15.9K deposits, the current period is characterized by a fraction of the size at about 2k and 3k BTC.
Investors Still Show Strong Confidence In BTC
This period of Bitcoin weakness isn’t moving the way other periods have moved when it comes to investors’ interests. In other moments of BTC weakness, exchanges saw massive BTC outflows, but there seems to be more investor confidence in the present situation.
Also, this time, the weakness was caused by heavy influence in the derivatives market rather than spot selling, Glassnode added in its weekly report.