ANALYSIS: Divergence in Bitcoin Price and Hash Rate May Set the Stage for a Potential Rally

Discrepancies between Bitcoin's price and its hash rate, or the network's total computing power, could lead to price increases for the largest digital asset. Historically, these divergences have only occurred a few times in the past three years. In some cases, the Bitcoin price bottomed out during these events and then rebounded as the market caught up with rising hash rates. The bitcoin network's hash rate rises and falls depending on how many miners' mining computers are online to verify transactions. Consistent with this pattern, Bitcoin has shown signs of recovery, rising about $9,000 since bottoming out on 6 September. This discrepancy between the price of bitcoin and its hash rate began to develop in July and then continued into early September, when the network's computing power reached an all-time high of 693 EH/s on a seven-day moving average and the price of bitcoin approached $54,000.