Bullish Bitcoin Indicator Which Led To A Reversal Has Returned, Is $70,000 Possible?

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 usually precedes a bottom ad reversal of the bearish cross, which happened after the halving event. He, however, warned that a bullish reversal still depends on a “stabilization in the downtrend.”

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The crypto analyst further noted that the percentage difference between the 30- and 90-day moving averages aligns with previous hash rate contractions and isn’t as severe as the post-2020 halving. A slowdown in Bitcoin’s hash rate decline is significant because it suggests that miners’ capitulation may be ending soon. 

Crypto expert Willy Woo previously mentioned that the market will recover when “weak miners die, and hash rate recovers.” He further explained that inefficient miners will have to go into bankruptcy while other miners are forced to purchase more efficient hardware.

Cryptoquant’s CEO Ki Young Ju has provided insights into when this miners’ capitulation might end. He stated that it usually ends when the daily average mined value is 40% of the yearly average. The crypto founder further revealed that it is currently at 72%, suggesting that it could still take a while 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 next two to three months. He urged them to stay long-term bullish but avoid excessive risk. Crypto analysts like Mikybull Crypto have also assured that Bitcoin’s long-term outlook is bullish as the flagship crypto is still far from its bull market peak. 

Market Still Recovering From Supply Overhang

Coutts also mentioned that the market is still recovering from the supply overhang. This is in relation to the selling pressure that Bitcoin experienced thanks to the German government, which offloaded nearly 50,000 BTC on the market. As such, it could take a while for the market to suck up this Bitcoin supply. 

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While this selling pressure has negatively impacted the market, Coutts stated that the distributions of the German government sales and Mt. Gox reserves can help remove the “annoying supply overhang.” The analyst noted that this would happen through distributing these coins to a wider array of holders, which would, in turn, grow the Bitcoin network and leave the flagship crypto even better off than before. 

At the time of writing, Bitcoin is trading at around $58,300, up over 2% in the last 24 hours, according to data from CoinMarketCap. 

Featured image created with Dall.E, chart from Tradingview.com