Bitcoin price got off to an impressive start in 2023. However, new charts provided by analysts of The Motley Fool show that its true value is different.
Which direction is the Bitcoin price pointing?
Bitcoin (BTC) is recovering in the new year after a dismal 2022. It has gained more than 70% since the beginning of the year. While this jump is refreshing, especially considering it achieved this in less than four months, Bitcoin is still almost 60% below ATH.
However, there are two charts that might add some perspective and shed light on whether BTC is a buy or sell today…
Hash rate continues to rise
The primary investment thesis for Bitcoin is that it is one of the most decentralized and highly secure networks in the world. There are two metrics that allow traders to see how well the leading crypto is able to achieve this.
This statistic, known as hash rate, measures the computational power required to mine on the Bitcoin Blockchain. The higher the rate, the more difficult it becomes to mine Bitcoin blocks. Thus, it increases the security and decentralization of the network. There are quite a few dynamics in the game when it comes to hash rate. But what investors need to know is that Bitcoin’s hash rate today is just below the ATH level.
Bitcoin price has experienced multiple bear markets and crypto winters. Now, there is a clear trend that the hash rate is increasing over time regardless of market conditions. It’s hard to stress how important this is. As long as the hash rate continues in this uptrend, the investment proposition in Bitcoin remains intact.
‘Opportunity abounds as Bitcoin price hovers around bottom’
Although the Bitcoin hash rate is at record highs, its price is far from its 2021 peak at $69,000. Based on the chart below, we can get an idea of the current state of Bitcoin during these bullish and bearish cycles that have become very common.
But rather than just showing the price, this chart shows Bitcoin’s percentage drop from the previous ATH level. In summary, Bitcoin price manages to bounce back after a certain period of time after hitting bottom.
As Kriptokoin.com, we have included the critical technical levels to be followed on the BTC chart this week in this article. Based on the metrics above, RJ Fulton, analyst at The Motley Fool, comments on the relationship between price and hash rate:
The combination of Bitcoin’s bottom price and the hash rate currently close to ATH is probably the only argument needed to warrant investment in the cryptocurrency today. While we can never be certain, if the next bull market comes, investors today may be ready to reap the biggest rewards.
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