Jamie Coutts, the chief crypto analyst at Real Vision, has highlighted an indicator that paints a bullish picture for Bitcoin (BTC). Based on this indicator, the crypto analyst suggested that a reversal might already be on the horizon for the flagship crypto.
Bitcoin Hashrate Decline Is Slowing
Coutts mentioned in an X (formerly Twitter) post that Bitcoin’s hash rate decline is slowing, which he noted often precedes a bottom ad reversal of the bearish cross, which happened after the halving event. He, nevertheless, warned that a bullish reversal still is determined by a “stabilization within the downtrend.”
Related Reading
Source: X
The crypto analyst further noted that the proportion difference between the 30- and 90-day moving averages aligns with previous hash rate contractions and isn’t as severe because the post-2020 halving. A slowdown in Bitcoin’s hash rate decline is important since it suggests that miners’ capitulation could also be ending soon.
Crypto expert Willy Woo previously mentioned that the market will get better when “weak miners die, and hash rate recovers.” He further explained that inefficient miners may have to go into chapter 11 while other miners are forced to buy more efficient hardware.
Cryptoquant’s CEO Ki Young Ju has provided insights into when this miners’ capitulation might end. He stated that it often ends when the every day average mined value is 40% of the yearly average. The crypto founder further revealed that it’s currently at 72%, suggesting that it could still take some time before miners eventually cool off on offloading their reserves.
Ki Young Ju told market participants to expect the crypto markets to be dull for the following two to a few months. He urged them to remain long-term bullish but avoid excessive risk. Crypto analysts like Mikybull Crypto have also assured that Bitcoin’s long-term outlook is bullish because the flagship crypto continues to be removed from its bull market peak.
Market Still Recovering From Supply Overhang
Coutts also mentioned that the market continues to be recovering from the provision overhang. That is in relation to the selling pressure that Bitcoin experienced because of the German government, which offloaded nearly 50,000 BTC available on the market. As such, it could take some time for the market to suck up this Bitcoin supply.
Related Reading
Source: X
While this selling pressure has negatively impacted the market, Coutts stated that the distributions of the German government sales and Mt. Gox reserves might help remove the “annoying supply overhang.” The analyst noted that this could occur through distributing these coins to a wider array of holders, which might, in turn, grow the Bitcoin network and leave the flagship crypto even higher off than before.
On the time of writing, Bitcoin is trading at around $58,300, up over 2% within the last 24 hours, in line with data from CoinMarketCap.
BTC price holding above $58,000 | Source: BTCUSD on Tradingview.com
Featured image created with Dall.E, chart from Tradingview.com