Jamie Coutts, the chief crypto analyst at Real Vision, has pointed out an indicator that suggests a bullish trend for Bitcoin (BTC). According to Coutts, this indicator indicates that a reversal may be on the horizon for the leading cryptocurrency.
The key point highlighted by Coutts is that the decline in Bitcoin’s hash rate is slowing down. This slowdown typically precedes a bottom and a reversal of the bearish trend that followed the halving event. However, Coutts cautioned that a bullish reversal still hinges on a stabilization in the ongoing downtrend.
The percentage difference between the 30- and 90-day moving averages, as noted by Coutts, aligns with previous hash rate contractions and is not as severe as the post-2020 halving. This slowdown in the decline of Bitcoin’s hash rate is significant as it suggests that miners’ capitulation may be nearing its end.
Crypto expert Willy Woo has previously mentioned that the market will recover once weak miners exit and the hash rate bounces back. He explained that inefficient miners may go bankrupt while others will need to invest in more efficient hardware.
CEO of Cryptoquant, Ki Young Ju, has provided insights into when miners’ capitulation might come to an end. According to Ju, this usually occurs when the daily average mined value is 40% of the yearly average. Currently, it stands at 72%, indicating that it may take some time before miners stop offloading their reserves.
Ki Young Ju advised market participants to expect a dull period in the crypto markets for the next two to three months. He recommended staying bullish in the long term while avoiding excessive risk. Other analysts, like Mikybull Crypto, have also affirmed that Bitcoin’s long-term outlook remains bullish as it is still far from reaching its peak in the bull market.
Coutts also mentioned that the market is still recovering from a supply overhang caused by selling pressure from the German government, which unloaded nearly 50,000 BTC on the market. It may take some time for the market to absorb this excess Bitcoin supply.
Despite the challenges posed by the selling pressure, Coutts believes that distributions of the German government sales and Mt. Gox reserves could help alleviate the supply overhang. By distributing these coins to a wider range of holders, it could strengthen the Bitcoin network and benefit the flagship cryptocurrency in the long run.
As of the latest update, Bitcoin is trading at around $58,300, showing an increase of over 2% in the last 24 hours, according to data from CoinMarketCap.