Hash rate is the total computing power used to validate transactions on the Bitcoin (BTC) blockchain. According to a Cointelegraph report, higher strength means greater network security and an interest in the potential profitability of Bitcoin mining.

The speed of hash depends on the bitcoin value.
The increase in retail is often associated with the expectation that the price of BTC will rise. Analysts found evidence that bull cycles in 2013 and 2016 were marked by increased mining problems following an increase in cannabis.

For example, in 2021, profits are down 70% due to increased investment and large orders for mining equipment. But it is almost impossible to determine cause and effect.

Some examples include Argo Blockchain, which is purchasing a 320-acre pilot plot in Texas to expand its business, Bitfury’s US mining business has been floated to the public, and BTC.com’s mining complex has taken over the Chinese lottery.

However, there have been periods of sheer dissonance, so there may not be a direct relationship between the price of Bitcoins and the proven strength of the miners.

Although impossible to measure accurately, average hash rate over seven days gives the best results for detecting trend changes.

2017 was likely an extraordinary year in terms of bitcoin’s price as bitcoin entered the parabolic inflation phase. In August, the frequency of cannabis repetition tripled to 6.8 TH / s. But the theory that hash rate could predict price was undermined when processing power suddenly decreased by 25% without any apparent effect on price.

On the one hand, Bitcoin’s 132% rise in the last two months of 2017 appears to have echoed after only a few months in hash, increasing more than twice from December 2017 to March 2018.

Bitcoin hash rate, TH / s (left) versus BTC price, USD (right). Source: Mineral scales
The second half of 2018 and 2019 provides a more interesting data set as BTC price experienced stronger moves and recessions. Meanwhile, from April 2018 to November 2018, the hash rate doubled, peaking at 54 TH / s. Oddly, this peak occurred during a sharp correction of BTC to $ 4,000.

On the other hand, both indicators reached a bottom in mid-December 2018, while the first half of 2019 showed a synchronized movement between BTC price and hash rate.

In the second half of 2019, completely opposite trends were observed: the hash rate increased by 66%, while the bitcoin price decreased by 38%. This time, BTC’s price peaked at $ 10,200 in mid-February 2020, just three weeks after the hash rate.

Bitcoin Retail Price and Full Time Price Today
Recent data also shows a strong relationship between the two calculations. Additionally, the retail peak of 166 TH per second on February 8 appears to have been simulated two weeks later when BTC peaked near $ 55,000.

Bitcoin hash rate, TH / s (left) versus BTC price, USD (right). Source: Mineral scales
Thus, there is undoubtedly a strong relationship between hash rate and price, despite having periods of six months or more as the mining capacity has continued to expand despite the fact that bitcoin prices have stagnated.

The same can be said about the sharp drop in the retail rate, for example, the last drop in October 2020, which did not affect the price of BTC. Therefore, such a calculation to forecast short-term price movements appears to be unreliable. In other words, the hash rate and price dynamics, although related to each other, provide a series of mixed signals that are sure to confuse any trader.

However, despite the apparent long-term relationship, there are other factors to consider as well, as they may have a more direct effect on price. These include new production, regulation, seasonality, geography, and energy price fluctuations around the world.

Source: CoinTelegraph