The average hash rate for Bitcoin has a seven-day average of 129 TH/s but continues to face resistance as the 12K level. That is contrary to expectation as the hash rate is the highest it has ever been.
Blockchain.com confirmed that Bitcoin’s seven-day average has rate attained 129.075 TH/s on August 15th. This came across as a primary achievement as its previous two weeks were the worst with a stagnant hash rate growth.
Hash rate is the amount of processing power miners use to validate a Bitcoin transaction. When the hash rate is high, it means that miners are making more money from the transactions. That indicates there is a positive correlation between hashrate and price.
In August, Bitcoin surged past $12k before dropping its value to the $11k range. The new resistance level is $12k level, as Bitcoin ranges between $11,700 and $11,900 over the weekend.
Increasing hash rate signal
With the rise in hash rate, it may be indicating many things. It may be bullish on the price of Bitcoin. Miners may use the hash rate to predict the price of Bitcoin. According to analysts, miners may use hash rate to manipulate the price of bitcoin. Miners may opt to hoard newly mined coins instead of releasing them, which may reduce the supply of Bitcoins in the market, increasing the price of Bitcoin.
According to Philip Gradwell from Chainalysis, a higher hashrate does not always indicate an increase in price. There has not been a direct correlation between the hash rate and the Bitcoin price before. For example, in 2019, the amount of Bitcoin dropped by 30%, although the hash rate rose by 64%. There is a possibility that the current trend will not hold water for long.
Gold Vs. Bitcoin
The term Bitcoin is the digital gold has taken a new wave in 2020 as there has been a positive correlation with investors opting to turn from traditional finance. This is a move that has also been embraced by the Federal Reserve and the Central banks.
With the rise in the price of Bitcoin, the price of gold has also increased. It recently passed the $2000 per ounce mark, and analysts believe it has had its bull run. The recent move by Warren Buffet to buy gold shares will have a positive impact on both Bitcoin and gold.