Bitcoin Recovers $50,000 As Hash Rate Is Growing

After more than 3 months of dropping below $50,000, Bitcoin has reclaimed this price level again in a recovery. The price dropped to a low of $29,601 in July. Shortly after that, it started its month-long recovery to reach $50,000 once again. During this period, Bitcoin has gained over 40% from the July low.

The rise has been driven by more investors entering the space. This is as Bitcoin continues to get more attention as an investment option. PayPal announced that they will offer crypto trading services in the UK. Iran is allowing crypto mining again, after a 4-month ban. And SEC chairman Garry Gensler recently said that Bitcoin is real. Speaking on the technology, he said although there is a lot of hype in the crypto space, “Nakamoto’s innovation” is real.

This coming from the head of the SEC is likely to encourage investors to invest in the asset and this could be a factor in the price increase.

Hash rate bounces and is growing

One of Bitcoin’s key metrics that have accompanied the rise in Bitcoin’s price is the hash rate. This is the rate at which miners can solve the mathematical problems leading to the mining of blocks. Ideally, the hash rate should increase with an increase in the price of Bitcoin. The hash rate is indeed rising as the price of Bitcoin is rising.

After dropping to a low of 84.79 million TH/s, the rate surged to reach 125.74 million TH/S yesterday. As the price continues to soar, the hash rate is expected to keep growing towards the high of over 180 million TH/s. This usually suggests that a bullish trend is in force.

Meanwhile, another bullish indicator showing up is the reduction in the number of Bitcoins on exchanges. Data from one chain analytics platform Glassnode shows that investors are massively withdrawing their Bitcoin holdings from exchanges. This is a sign that investors are getting more bullish on Bitcoin and are trying to keep their assets safe offline.

#Bitcoin exchange flows have returned to a dominance of outflows through August as investors withdraw $BTC.

The market has transitioned through a number of phases of exchange flow dominance over the last year, with outflow dominance last seen in late 2020. pic.twitter.com/BQLlw06SJr

— glassnode (@glassnode) August 19, 2021

Altcoins also picking the momentum

According to the altcoins season index, the last few months have been a Bitcoin season. However, some altcoins have been riding on the back of Bitcoin’s rally and gained significantly. One of such is Ethereum, the second largest cryptocurrency after Bitcoin. Several others such as XRP and Cardano have also done well recently with Bitcoin’s price surge.

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