This could save Bitcoin if the price falls

The past few days have been pretty traumatic for bitcoin bulls. Last night the price fell to its lowest level of $ 39,787 since August, but BTC has broken through and is trading at $ 42,074 at press time.

BTC Price Chart | Source: Tradingview

Base factor

Despite the continuously falling price, the Bitcoin network is still recovering. The hashrate continued to rise last week, reaching 150 exahashes on a 7-day moving average. Compared to the July low, the hashrate rebounded more than 52%. Overall, this means that the network has become more and more secure since July.

Average Bitcoin Hashrate | The source: Glass knot

Conduct of miners

As of last year, miners have tended to HODL the majority of coins mined compared to previous cycles. However, around 1,360 BTC were issued by the miners in late August, while there was a moderate sell-off in early September.

In fact, miners have amassed around 14,000 BTC in just 6.5 months, making the amount of coins issued almost negligible. The accumulation trend is still confirmed by the status of the MPI. The Miner Position Index (MPI) is the percentage of all Bitcoin leaving miner wallets relative to its annual moving average.

A value above 2 means that miners are actively selling in the market. However, the -0.49 shown in the graphic below clearly underlines the accumulation / HODL trend.

Miner position index | The source: KryptoQuant

The Thermocap stand highlights another interesting trend. The value of this metric is currently around $ 30 billion. Thermocap is an indicator that aims to track the Bitcoin price cycle based on the actions taken by miners and investors when buying and selling Bitcoin. In parallel, BTC’s market cap is currently in the range of $ 700 billion to $ 800 billion.

If you combine these two metrics, it is clear that Bitcoin is being traded at around 29 times its production costs. Notably, the tops of the bull cycle typically peak between 32 and 64 times, and the current scenario suggests that the market is slowly moving towards similar levels.

index Thermal cap | The source: Glass knot

Hash Ribbon also seems pretty attractive at the time of writing. In particular, Bitcoin tends to bottom out when miners surrender. The hash band chart shows that the 30-day MA is trending higher than the 60-day MA. Such a crossover usually implies that the miners’ worst phase of surrender is over.

In essence, it is safe to say that Bitcoin will not fall significantly in the coming days. Fundamental factors are likely to pull price out of its plight.

Bitcoin is getting stronger than traditional assets

Bitcoin’s growth over the past 10 years has been unprecedented, especially when compared to other top investment options like gold, stocks, fiat money. It is important, however, that the extent of the growth was not really recognizable until a few years ago.

Profit over the past decade | The source: Chris Bridgett

It took 6 years for BTC to go from $ 3 to $ 10,000. In the four years since then, however, the price has risen 5.6 times, reaching nearly $ 65,000 in the meantime.

Bitcoin growth rate over the years | The source: TradingView

Surprisingly, the second price escalation was also thanks to the most controversial Bitcoin holders, especially MicroStrategy.

At the same time, Bitcoin’s growth is directly linked to the need for decentralization. This demand has also helped drive adoption of digital assets around the world.

For example, India, the country with the seventh largest user base in the world, has faced bank fraud that cost up to $ 46.5 billion for the past 10 to 11 years. The advent of cryptocurrencies can be a great solution to this problem thanks to the immutability and decentralization of blockchain technology. It offers transparency, independence and, above all, privacy. It was the first thing that drove people to crypto. In fact, the crypto adoption rate has increased 3,180% in the last 2 years alone.

Such an incredible growth process helped make Bitcoin mainstream, attracting more than 300 million users by June.

Number of global cryptocurrency users | The source: Triple A.

Why are many people still not choosing crypto?

Of the total world population, crypto users make up only 3.7%.

Bitcoin adoption rate has increased 3100% in the past 2 years | The source: Chain analysis

People are skeptical when it comes to investing due to FUD loss. Therefore, it makes sense to hesitate about investing in an asset whose volatility could make it rich or empty overnight.

In fact, many people believe that other assets are safe only, especially as most regulators share the same view.

However, the US Securities and Exchange Commission, for example, can prevent or punish any fraudster in most cases. But they also take control of every stock that exists in the market. Such power easily leads to corruption in the market.

This does not mean that the SEC is violating anything or deserving of indictment. The system is likely working fine, but human error cannot be overlooked.

This is precisely why decentralization is the order of the day, so that no one is dependent on individuals or groups. Investors are also freed from all fears of theft etc. through a 51% attack. This prevents anyone from stealing from the blockchain or controlling it in any way, thereby reducing crime and corruption.

Can Bitcoin Convert Finances and Investments?

A clear yes or no to the above question is currently not possible, especially since the acceptance of cryptocurrencies has only recently increased.

The nagging discussion about whether Bitcoin is just a fad or FUD is no longer mentioned, however, as the king of cryptocurrencies is becoming the de facto financial instrument worldwide. Even so, the fear of negative changes is always present in the minds of investors.

Bitcoin alone cannot transform finance and investment as its primary function remains a store of value. Therefore, the dependence on other chains and crypto currencies is also increasing.

Overall, we shouldn’t expect cryptocurrencies to be sold around the world in the foreseeable future. Especially since there are many concerns that remain unresolved in light of their evolving needs and novelties.

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