VanEck: Recent Bitcoin miners' "surrender" may indicate that the bottom is near.
TL;DR
VanEck analysts suggest that a recent 4% drop in Bitcoin's hashrate, indicating miner capitulation, could signal a price bottom and bullish future returns based on historical patterns.
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On December 23, Cointelegraph reported that VanEck analysts stated that the Bitcoin network hashrate decreased by 4% in the month ending December 15. This could be beneficial for Bitcoin's price in the coming months, as miner capitulation has historically been considered a bullish contrarian indicator.
In a report released Monday, VanEck’s Head of Crypto Research, Matt Sigel, and Senior Investment Analyst, Patrick Bush, noted that “when computing power declines for an extended period, the probability of future positive returns is higher, and the magnitude of those returns tends to be greater.”
They also stated that since 2014, when the Bitcoin network hashrate decreased in the preceding 30 days, the probability of a positive 90-day forward return reached 65%; while when the hashrate increased, this proportion was only 54%. This pattern also holds true over a longer time horizon: when the hashrate growth rate was negative in the preceding 90 days, the probability of a Bitcoin price increase in the following 180 days reached 77%, with an average increase of approximately 72%; while when the hashrate increased during the same period, the probability of a positive 180-day return was only 61%.