After Bitcoin recently surged to its highest value since January, analysts at VanEck expressed a continued bullish outlook on the cryptocurrency, citing various positive on-chain signals and favorable historical trends. Bitcoin’s hash rate currently stands at a 30-day moving average of 985.5 EH/s, marking a 7.5% decline from its all-time high of 1,065.7 EH/s registered in late November. Despite experiencing three significant downturns in the past five months, the analysis suggests that such drawdowns can often lead to price increases in the long run.
The latest decline, which concluded on April 15 after lasting 16 days, had a peak drop of 6.7%. Historically, these episodes of hash rate decline have proven to be bullish for Bitcoin, with six out of seven decreasing hash rate periods resulting in a price increase 90 days later, averaging a notable median gain of 37.7%. Analysts also pointed to negative funding rates as a strong predictor of returns. Since 2020, Bitcoin has averaged 11.5% returns in 30-day spans where funding was negative, in contrast to an overall return of 4.5%. When funding rates fell below -5%, returns soared to 19.4% over 30-day intervals and reached an impressive 70% over 180 days.
Moreover, current transfer volumes in the market are reported at $48.5 billion daily, placing it in the 81st percentile but reflecting a 5% decrease month-over-month as positioning adjustments occur alongside reduced market volatility.
In addition to these metrics, the sentiment surrounding Bitcoin exchange-traded products (ETPs) is witnessing a significant turnaround. Following an extended period of outflows totaling $4 billion from January 24 to February 21, Bitcoin ETPs have seen net positive inflows in six out of the subsequent seven weeks, indicating a resurgence in institutional interest toward Bitcoin exposure after a phase of volatility following their launch.
VanEck’s findings corroborate trends observed in past market cycles, wherein a combination of hash rate reductions and negative funding rates often precede substantial price rallies. As of the latest updates, Bitcoin’s price has dipped approximately 0.8%, trading around $77,397. Notably, the cryptocurrency recently exceeded the $79,000 mark on Wednesday, reflecting an increase of over 11% in the last 30 days, according to data from CoinGecko.
