Just a week ago, Bitcoin was trading at almost $ 10,000, but since then the cryptocurrency has dropped to $ 8,795.
Some argue that this is a healthy correction, but a key indicator suggests that more losses may lie ahead.
Due to halving, the miners’ income was halved. Those who paid too high prices for electricity or those who used older equipment had to cease operations.
As a result, Bitcoin ‘s hash rate has dropped by about 20% from its highest values.
This decline is about to be reflected by the Hash Strips – an indicator that tracks the intersections of two averages on the hash rate. He is about to make a bear cross, which happened last time just before Bitcoin dropped from $ 6,000 to $ 3,150 at the end of the 2018 bear market.
This cross, analysts say, signals the surrender of the miners. In this surrender, many miners sold their BTC to continue digging.
Although this blockchain indicator gives the sword a perspective, it has long-term bullish consequences.
Digital asset analyst Charles Edwards found that when the Hash Bands recovered – when the short-term average crossed the long-term – it was a good time to enter the market.
In December 2019, he wrote:
The hash strips are confirmed. This is the tenth time that these conditions have manifested. In all other cases we saw an average return to the peak of 5000%.