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A recent decline in Bitcoin network hashrate may suggest the cryptocurrency is nearing a market bottom, according to analysts at VanEck.
Bitcoin’s hashrate fell by roughly 4% in the month to December 15, marking its steepest drop since April 2024.
VanEck described prolonged hashrate compression as a historically bullish contrarian signal for Bitcoin prices.
When hash rate compression persists over longer periods, positive forward returns tend to occur more often and with greater magnitude.
Matt Sigel and Patrick Bush said.
The analysts explained that miner capitulation often removes inefficient operators from the network.
VanEck data shows Bitcoin posted positive 90-day returns 65% of the time following 30-day hashrate declines since 2014.
This compares with a 54% success rate when hashrate increased during the same period.
Over longer horizons, the trend becomes even more pronounced, according to the report.
Negative 90-day hashrate growth was followed by positive 180-day returns 77% of the time.
Average gains during those periods reached roughly 72%.
The pattern could offer relief to miners struggling with shrinking profit margins.
Rising prices may restore profitability or allow idle mining capacity to restart.
The asset remains nearly 30% below its October all-time high.
VanEck noted breakeven electricity costs for miners have dropped sharply.
The breakeven price for a Bitmain S19 XP miner has fallen nearly 36%.
Analysts linked the hashrate decline to the shutdown of around 1.3 gigawatts of mining capacity in China.
Some displaced energy capacity could be redirected to support artificial intelligence workloads.
VanEck estimated AI demand could remove up to 10% of Bitcoin’s hashrate.
The firm added that several governments continue to support Bitcoin mining.
At time of reporting, Bitcoin price was $88,772.70.