Bitcoin remains in consolidation below a critical resistance despite hash rate reaching record highs over the weekend.
- Data from Glassnode shows the seven-day average for bitcoin’s hash rate – the computing power dedicated to mining blocks – rose to a record high of 129.03 tera hashes per second (TH/s) over the weekend.
- Bitcoin’s July rally has stalled near $12,000, making the psychological level a resistance to beat for the bulls. It was sidelining near $11,900 at press time.
- But some argue that an increasing hash rate is a bullish price signal.
- Earlier this year, Jeremy Britton, CEO of Boston Trading Co told Finance Magnates rising hash rate forced miners to hoard rather than sell newly-mined coins, reducing downwards pressure and raising the price floor.
- But price increases don’t always follow from higher hash rates, according to Philip Gradwell, an economist at the blockchain intelligence firm Chainalysis.
- “Miners may be better at predicting the future price, but that doesn’t really cause the prices to go up,” Gradwell told CoinDesk in a Telegram chat on Monday.
- A direct correlation between the hash rate and the price has not been seen before – Bitcoin’s price fell 30% in the second half of 2019 even though the hash rate rose 64% to 97 TH/s.
- Stack Fund’s co-founder and COO Matthew Dibb told CoinDesk that miners may be scaling up their capacity, ergo hash rate, in anticipation of a rising bitcoin price, but didn’t think there was actually an established causal link between the two.
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