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According to VanEck analysts, Bitcoin's hash rate fell by 4% over the month ending December fifteenth. This move has caught the eye of market watchers as previous instances of hash rate declines often occurred before price increases.
VanEck's Matt Sigel and Patrick Bush point to historical patterns: When the hash rate fell over the past 30 days, Bitcoin's 90-day forward returns were positive 65% of the time, in comparison with 54% when the hash rate rose. Numbers matter here, and traders consider them a part of the evidence mix.
Hashrate compression can signal recoveries
Longer time frames are reportedly looking higher for bulls. When the hash rate shrank and remained low, the possibilities of recovery over longer periods of time improved. Negative 90-day hash rate growth was followed by positive 180-day Bitcoin returns 77% of the time, with a median increase of 72%.
Source: VanEck
The math is obvious and the pattern is consistent enough to draw investors' attention. Miners' economics add to the story: the break-even electricity price for a 2022-era Bitmain S19 XP fell nearly 36% from $0.12 per kilowatt-hour in December 2024 to $0.077/kWh by mid-December. This shift is eroding margins and forcing marginal operators to rethink their assets.
Miners' exit, monitoring the markets
Some capability has left the network. VanEck attributed the recent 4% decline to the shutdown of about 1.3 gigawatts of mining capability in China. Analysts also warn that increasing demand for AI computing could drain Bitcoin's capability, a trend they estimate could lead to the lack of 10% of the network's hash rate.
BTCUSD is currently trading at $87,533. Chart: TradingView
This would redistribute mining activity and will concentrate operations where power and politics align. At the identical time, support for mining has not disappeared worldwide. Up to 13 countries reportedly support mining activities, including Russia, Japan, France, El Salvador, Bhutan, Iran, United Arab Emirates, Oman, Ethiopia, Argentina and Kenya.
Price and market context
Bitcoin is trading at around $88,600, down nearly 30% from its Oct. 6 all-time high of $126,080. Markets were calm at the top of the yr and low liquidity can mask the true dynamics.
Source: VanEck
Recent reporting noted that BTC is stable near $89,000, moving in a certain range as traders weigh supply and demand signals. Other cross-plant measures are also necessary. Gold climbed above $4,400 an oz while silver hit $69.44 an oz, moves that some investors see as a part of a broader push for a refuge.
The data points suggest cautious optimism. Miner capitulation has historically acted as a contrarian signal – weaker miners exit, difficulty adjusts, and surviving operators face less short-term selling pressure. This sequence can create the conditions for price stabilization and profits for months.
Featured image from Pixabay, chart from TradingView
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