Cryptocurrency analyst James Van Straten has offered his views on Bitcoin (BTC) price movements, arguing that the divergence between price and hashrate, or the total processing power of the network, could signal an upcoming price rally.
Van Straten said these differences have historically indicated market recoveries, with Bitcoin typically rallying after catching up to hashrate.
“These divergences have only happened a few times in the past three years,” he said. “Bitcoin prices have bottomed locally and then rallied as the market caught up with hashrate.”
Bitcoin has recovered from its September 6 bottom of $54,000, gaining nearly $9,000, or 15%.
The divergence between price and hashrate started in July and lasted until early September, when the computing power reached 693 exahashes per second (EH/s), while the price remained around $54,000.
Increased activity by publicly listed mining companies is a major factor behind the hashrate increase. Public miners now hold about 23% of Bitcoin production, the highest since January 2023.
While September is typically a bearish month for Bitcoin, the price rose 7% this month, beating expectations. This trend, coupled with the divergence between price and hashrate, suggests that Bitcoin price may be catching up to hashrate.
Van Straten also noted that the September 25 Bitcoin mining difficulty adjustment, which is expected to drop by 5%, could support this theory. However, he cautioned that external factors such as interest rate decisions could influence further price movements.
