Mining Hash rates recently reached a new all-time high despite a recent slump caused by a forced Internet outage in Kazakhstan, preceding a Bitcoin price slump.
Reports from on-chain data provider IntoTheBlock have revealed that Bitcoin’s mining Hash Rate recently hit a new all-time high (ATH). This development has come just a few months after the Chinese government banned all crypto-related activities in China. Since the prohibition, global BTC mining hash rates have plummeted. They have since continued to grow steadily, with miners migrating to other countries with a more favorable disposition to crypto activities.
The quick recovery revealed in this data may dampen the narrative that Kazakhstan’s black-out influenced Bitcoin’s recent price action. This is because the prices did not mimic the surge seen in the hash rates.
Kazakstan’s Government Action Leads To slump In BTC Price
The Kazakhstan government recently declared a national state of emergency following widespread protests. Thousands of citizens took to the streets to demonstrate against rising fuel prices in the central Asian nation.
The nations’ officials shut down internet access in response to the protests, leading to many Bitcoin miners going offline. The resultant effect was a fall in the BTC mining hash rate from 194 EH/s to 168 EH/s, according to Coinwars.
One month chart of BTC hash rate. Source: Coinwars.
After the Chinese crypto ban, miners moved to Kazakstan due to its proximity and cheap electricity. Combined with a history of cryptocurrency mining, Kazakhstan quickly grew to rank second for the global mining hash rate. According to Cambridge Bitcoin Electricity Consumption Index (CBECI), the central Asian country accounts for 21% of hash rates worldwide. Investors’ sentiments may have been influenced, possibly leading to a slump recorded recently.
Source: CBECI
Kazakhstan’s initial mining boom has sputtered as the country faces power supply constraints. In the aftermath of Bitcoin’s rising popularity, the government has struggled to keep up with the energy demands for mining. The country’s authorities have imposed significant restrictions and opened a register on the energy-intensive industry due to the power shortages.
Bitcoin Slumps Proves To Be More Than A One-Off
Following the slight slump caused by the fall in global mining Hash Rates, Bitcoin’s price has continued its free fall. It recently dropped below $34,000, representing an over 50% slump from its ATH price of around $68,000, recorded in November 2021.
While the current market conditions might seem more bearish, investors’ sentiments may be divided. Some analysts insist that the bull run is far from over. A famous investor, ThatBitcoinguy, insists that despite the entire market collapse, Bitcoin will bounce once it reclaimed the $37,000 price mark.
Other analysts have insisted that the bear market is in full flow despite this bullish narrative. A Reddit user, u/wolfparking believes that going by a golden ratio shared on the platform a while back, investors should brace up for continued bearish conditions.
With conflicting narratives rife across the board, a look at on-chain metrics paints a somewhat bearish picture. According to a Glassnode report, recent activities revealed significant losses, a steep drawdown, a return to HODLer led accumulation, and top buyers taking profits. All of these point to bearish market conditions.
Kingsley is a fintech writer with over 4 years of experience covering blockchain and cryptocurrency news. Alo first discovered Bitcoin in 2016 and has been passionate about it ever since, particularly the various ways blockchain can help Africa and the world at large. He desires to give the crypto space a more geographically balanced narrative and serve as a bridge between Africa and the rest of the world. His articles have been featured in Cointelegraph, Beincrypto, and Forkast.news, among others.
