Bitcoin Poised to Surge Above $85k as Mining Costs Dictate Market Movements

  • Sergey Maga
  • 17 June, 2024 08:06
Bitcoin Poised to Surge Above $85k as Mining Costs Dictate Market Movements

Bitcoin (BTC) miners are once again at the forefront of the cryptocurrency market, influencing price dynamics with their selling activity. This selling pressure has been a significant factor in preventing Bitcoin from breaking through the $70,000 resistance. However, recent data suggests that miners will play a crucial role in driving Bitcoin’s price to new heights, according to Finbold.

Crypto analyst Ali Martinez highlighted on June 15 that Bitcoin’s average mining cost currently stands at $86,668. Historically, Bitcoin’s price has consistently surged above its average mining cost, indicating a strong bullish trend. Martinez stated, “Bitcoin’s average mining cost is currently at $86,668. And guess what? Historically, $BTC always surges above its average mining cost.”

A chart from MacroMicro supports this claim, showing the correlation between Bitcoin’s average mining costs, its market price, and the ratio between these metrics over time. The data reveals that Bitcoin’s price often exceeds mining costs during bullish phases. For example, significant price surges above mining costs were observed from mid-2016 to early 2018 and in the periods leading up to 2021 and mid-2023.

The 30-day moving average (MA) of the mining cost-to-price ratio also shows a cyclical pattern, with dips often preceding further price surges. This reinforces the idea that mining costs serve as a critical support level for Bitcoin’s market price.

With the current average mining cost at $86,668, Bitcoin must aim for this level to cover mining expenses. This aligns with the prevailing market consensus that Bitcoin is poised for further growth, likely driven by the post-halving bull run. If Bitcoin’s price reaches its average mining cost, it could rally by 30% from its current valuation.

Bitcoin investors are keenly watching for potential triggers to help the asset break out of its current consolidation phase. Mining activity is emerging as a key catalyst. Recent concerns about increased selling activity by miners have signaled potential price capitulations, briefly causing Bitcoin to drop below $67,000 and reach lows of $65,000. As of press time, Bitcoin is valued at $66,563, representing a minimal daily gain of almost 0.5%.

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