- Analysts are optimistic about Bitcoin as the network’s hashrate reaches a new all-time high.
- On-chain data also confirms whale accumulation between $16.5k and $18.2k.
Several metrics in the Bitcoin (BTC) space are showing indications that the pioneer cryptocurrency has found a price bottom.
One such indicator is highlighted by Dylan LeClair, the senior analyst at digital asset fund management firm UTXO Management. In a tweet, LeClair notes that Bitcoin hashrate is currently at an all-time high (ATH).
Bitcoin hashrate, which is a key Bitcoin network security metric, reached a 14-day moving average of 270 exahashes/second (EH/s) per the on-chain data. He also points out that the hashrate ATH has coincided with a reduction in the number of coins sold by miners. Based on this he tells his over 289,000 followers that miners look to be running out of inventory to dump.
Hash rate moving averages for a different perspective.
Miners look to be running out of inventory to dump. pic.twitter.com/FA7Srkiuuk
— Dylan LeClair 🟠 (@DylanLeClair_) January 11, 2023
Another optimistic sign is whale accumulation noted by the crypto market intelligence platform Glassnode. According to Glassnode, on-chain data shows that as BTC rose to $18.2k, over 13 percent of the circulating supply returned to profit.
The platform explains that this sharp spike in in-profit BTC holders confirms that a large volume of BTC was acquired between $16.5k and $18.2k.
As #Bitcoin rallies to $18.2k, over 13% of the Circulating Supply has returned to profit.
The observed sharp move upwards in this metric helps to confirm that a large volume of $BTC was acquired between $16.5k and $18.2k.https://t.co/yflZloDbSP pic.twitter.com/J8egLvYt3w
— glassnode (@glassnode) January 12, 2023
The analysis comes after Glassnode also noted that the BTC market is in a “volatility slumber” since 2023 started. The benchmark crypto’s realized volatility has fallen to extreme lows. From previous markets, similar levels of realized volatility have sparked explosive upward or downward market moves, the firm said.
Other bullish factors contributing to the recent BTC surge
Bitcoin has reached a local high of $18,300 in the last 24 hours. At press time, BTC was trading at around $17,990, up 3.14 percent on the day. The slight price drop began after the publication of the much anticipated U.S. Consumer Price Index data by the Labor Department.
CNBC reports that the data shows that CPI fell 0.1 percent in December in line with the Dow Jones estimate. Meanwhile, BTC is not the only asset that has reacted to the news. Stocks also began to tick lower following the data release after being on a surge from the previous day.
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However, the data has matched market expectations. This in turn is raising hope that the Fed will continue with its slowed-down interest rate hikes to tackle inflation, according to CNBC. Market participants are now anticipating a 0.25 basis point interest rate hike implementation when the Fed meets between Jan. 31 and Feb. 1 for their first FOMC meeting in 2023.
The move by the Fed could spark a return of a bull run for risk assets like BTC. However, the crypto market could also face other headwinds that could plunge prices further. One of these is likely to come from the FTX case as the crypto exchange is looking to sell over $4.6 billion worth of recovered assets to compensate its users.
