A closely watched crypto analyst says a Bitcoin (BTC) metric that previously predicted a bullish reversal is flashing green again.
Jamie Coutts, the lead crypto analyst at Real Vision, say that slows Bitcoin’s hashrate decline, a signal that typically precedes momentum reversal for the crypto king.
However, he notes that the forecast depends on the stabilization of BTC’s hashrate decline.
“Noting that Bitcoin’s hashrate decline is slowing, which typically precedes a bottom and reversal of the bearish cross after the May halving. However, this is based on a stabilization in the downward trend. The market is still processing the surplus supply.
Notably, the percentage difference between the 30- and 90-day moving averages is consistent with previous hashrate contractions and not as severe as the halving after 2020.”
Coutts says that while Bitcoin sales by Mount Gox – a prominent BTC exchange that went bankrupt after being hacked in 2014 – may be bad for Bitcoin’s price in the short term, the network will help over time to grow.
“While painful in the short term, the Mt.Gox reserve distributions and government sales remove the pesky supply glut, allowing coins to be distributed to a wider range of holders, growing the network and leaving Bitcoin even better off than before. ”
Earlier this month, macroeconomist Alex Krüger and analysts at market intelligence platform CoinShares both shared the view that Mount Gox’s selling pressure wouldn’t be that bad for Bitcoin.
Bitcoin is trading at $57,635 at the time of writing, down fractionally over the past 24 hours.
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Generated image: Midjourney