Journalist
Posted:
- Bitcoin’s hashrate hit a seven-day high, putting BTC at risk of another decline.
- Shorts can be liquidated if the CLLD rises.
Bitcoins [BTC] hashrate has reached its highest point in the past seven days, according to AMBCrypto data noticed from CoinWarz. At the time of writing, the hashrate of the king coin was 564.88 Exahash per second (EH/s).
Source: CoinWarz
Bitcoin’s hashrate provides an estimate of the computing power miners use to process transactions on the blockchain. This process is sometimes complex, but miners make sure they confirm the legitimacy of a transaction before adding it to the blockchain.
A high hashrate is risky for BTC
Gigisulivan, an author from CryptoQuant, commented on the hashrate increase and how it could affect the price of BTC. According to Gigisulivan, who also serves as an on-chain analyst, BTC may be about to drop to $31,500 due to the sharp increase in hashrate.
To support his position, the analyst compared the current situation situation with the state of BTC around September 15th. It was also around this period that hashrate reached a new high. During that period, Bitcoin rose to $26,700.
Regarding the press time situation, Gigisulivan noted:
“Important to note is that two weeks ago we had another new high on hashrate, which is stalling within the usual time frame and pump-to-dump range.Most likely, the pullback target will be between 30 and 31.5 thousand.”
At the time of writing, the price of BTC was $36,643. This value, compared to the altcoin prices of the past 24 hours, showed that of Bitcoin dominance was declining. To determine how the King Coin might perform, AMBCrypto evaluated data on liquidation levels provided by HyblockCapital.
By definition, liquidation levels are potential price levels that could lead to a trader’s position being wiped out. A look at the data showed that BTC could fall sharply at some point.
Source: HyblockCapital
Short-term holders should beware
However, if the Cumulative Liq Level Delta (CLLD) rises, shorts can be liquidated. This is because the trend may reverse to the bullish side. But at the time of writing, traders were opening short positions for BTC with an average leverage of 25x.
Furthermore, mining-related metrics such as the ratio of market cap to thermocap provided some information about the value of BTC. The Market Cap to Thermocap Ratio can be used to assess whether the asset’s price is currently trading at a premium.
To obtain this value, Glassnode also takes into account the total security spent by miners. Historically, there has been a high ratio of market capitalization to Thermocap spotted that Bitcoin is at the top of a market cycle.
Read Bitcoins [BTC] Price prediction 2023-2024
When the ratio is low, it means it is a relatively good time to buy. At the time of writing, the ratio of market cap to Thermocap was 0.00000065.
Source: Glassnode
For the short term holdersThe value of BTC above $36,000 indicated that it could be risky to buy the coin and profit from it at the time of writing. Meanwhile, long-term holders had the chance to accumulate BTC at a discount regardless of the current direction.
