Currently, Bitcoin is trading at $7,200, up 5.66%, making a good start of the new quarter. In the past week, the crypto asset has surged 13% and is now looking to turn positive yet again on a year-to-date basis.
Bitcoin price has been giving off recovering signals for quite some time now, with retailers and institutions both jumping in on bitcoin. Now, miners who tumbled into unprofitable territory have also turned positive.
Moreover, the hash rate is keeping above 100 Th/s after falling to 85 Th/s last month after the price crash.
According to on-chain analyst Willy Woo, some miners capitulated when the hash rate dropped 45% in March. Now that we are recovering, he is not expecting any more selling pressure from miners.
“Hash Ribbons recovering (assumes no lower low), a reliable bottom signal, probably some miner capitulation during the crash. They last got culled in Dec 2018, only the strong remain, I don’t expect miners to add more sell pressure from here,” said Woo.
Miners Energy Ratio is yet another indicator miner chart which is bullish. “Profit margin for minting new coins are at historic lows, a good sign for bottoms,” said Woo.
However, as Bitfinex Bitcoin whale Joe007 emphasized, with the prices already low, come halving overleveraged miners will be affected harshly.
Meanwhile, more hash rate is added to the bitcoin network with just a month left for the reward halving that will cut down the miners’ flow from 1800 BTC per day to 900 BTC per day.
But Woo says we are “over-estimating” the impact of supply shock — which the crypto community has taken to refer to as “quantitative hardening” in the ongoing backdrop of quantitative easing (QE) taken by central banks — in this cycle.
Historically, the mining cost of each bitcoin via its interactions with sell pressure has resulted in its floor price. This time, post-halving the floor would be around $7,000-$8,000.
As we are currently seeing, Bitcoin price is going up, “weathering the biggest crisis we’ve seen perhaps since the Great Depression,” which Woo said is the digital asset’s “first big test of its safe haven properties.”
Not just bitcoin, today gold and stock markets everything is surging on the back of coronavirus spread slowing down.
But according to Raoul Pal, the former hedge-fund manager who founded Real Vision, another 20% downside is expected before “3- or 4-month bounce of hope” quashing any hopes for a V-shaped recovery in the stock market.
With “the whole world f—ed,” Pal suggests positioning your portfolio with 25% each in bitcoin, gold, cash, and trading opportunities.
Another bitcoin supporter and early investor, Chamath Palihapitiya, Social Capital CEO said, “(Bitcoin) is either zero or it’s millions.”
The cryptocurrency he said is still a speculative investment but “the path dependence for Bitcoin is if it looks like [debasement] is likely, it will really emerge as a flight to safety.”