According to CoinDesk, the divergence between Bitcoin's hash rate and its price could indicate a potential rally, based on historical data. September's counter-seasonal price trend has already begun to reflect this divergence. Publicly traded miners have increased their market share post-halving by boosting their computing power and accumulating bitcoin, potentially reducing market supply and raising the chance of a price increase.
Historically, divergences between Bitcoin's price and its hash rate have occurred only a few times in the past three years. In some instances, Bitcoin prices have reached a local bottom during these events, followed by a rally as the market catches up with the rising hash rate. The Bitcoin network's hash rates fluctuate based on the number of miners validating transactions. Consistent with this pattern, Bitcoin has shown signs of recovery, gaining about $9,000 since the local bottom on Sept. 6, representing a 15% increase in value. This divergence began to shape up in July and persisted into early September, when the network's computing power reached an all-time high of 693 exahashes per second (EH/s) on a seven-day moving average, while Bitcoin's price was near $54,000.
A significant factor contributing to the recent surge in hash rate is the activity of publicly traded mining companies. Before the halving, the hash rate peaked at 650 EH/s and dropped to 550 EH/s in June as less efficient miners exited the network due to higher competition. It has now returned to pre-halving levels as well-capitalized publicly traded miners have increased their market share by raising their computing power. Data from sixteen public companies show they have almost reached a 23% market share in production, the highest since at least January 2023, according to TheMinerMag. It is likely that publicly traded miners will continue to capture a larger share of the hash rate over time as they compete to stay profitable post-halving.
September has historically been a bearish month for Bitcoin, with historical data from Coinglass indicating an average price decline of 4%. However, this year has defied that trend, with Bitcoin posting a 7% increase so far. This counter-seasonal trend could indicate that due to the lower Bitcoin price and rising hash rate, the price could be playing catch up with the hash rate, potentially setting up for another rally. Other market factors, such as interest rate decisions, could also catalyze this price change. Additionally, the next difficulty adjustment, scheduled for Sept. 25 and projected to decrease by 5%, could indicate that prices may be catching up. Blocks are currently being mined at an average of 10.5 minutes, indicating a potential slowdown in the hash rate as the price plays catch up.
Another factor that could signal a potential rise in price is miners' actions with their mined Bitcoin. Glassnode data indicates that from November 2023 to August 2024, miners consistently sold Bitcoin to fund their operations due to the halving, marking one of the longest periods of sell pressure on record. However, in the past 30 days, miners began accumulating Bitcoin in their wallets, suggesting that the financial strain from the halving is largely over. If miners are distributing less Bitcoin, this reduces the supply entering the market, increasing the chance of potentially helping the price.
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