Bitcoin falls below $9,000, but three reasons remain bullish

Bitcoin has fallen below $9,000, but here are three reasons to remain bullish on Bitcoin:

1. Miners continue to push up the hash rate;

2. Bitcoin HODLers are more bullish than ever;

3. Analysts believe the dollar will depreciate.

After lingering for a while on Saturday, Bitcoin finally fell below $9,000, hitting its lowest point in more than a week and leading to the liquidation of tens of millions of dollars worth of longs.

However, many analysts remain fundamentally optimistic and point to a number of trends that suggest Bitcoin still has a bullish tone. The following 3 trends tell you why the market outlook remains bullish.

#1: Miners continue to pursue higher hashrate

After the Bitcoin block reward was halved in May, Bitcoin’s hash rate has declined.

The halving essentially caused a 50% drop in miner revenue, and as a result, many marginal miners were forced to shut down their machines.

Financial podcaster Preston Pysh wrote after the halving:

“During the 2016 halving, the price went sideways for 9 days, then dropped 28%, taking 100 days to recover to the price before the halving. Be prepared for the halving and difficulty adjustment, Bitcoin is ready for everyone to get off the halving.”

However, miners were able to recover quickly due to what appears to be a flood season in China and the adoption of new mining hardware. CoinMetrics reported earlier this month that the Bitcoin network’s hashrate has now returned to pre-halving levels.

This is reflected in the “hash ribbons,” a metric that derives a positive signal from the moving average of hashrate. Digital asset manager Charles Edwards wrote about this hashrate-based metric:

Hashrate “recovery” looks like it could happen by the end of next week… A “hash ribbons” “buy” signal would also need price momentum to improve from here, so it could take more than a week.”

Hash Ribbons are very important as they show bullish signals before bullish rallies.

#2: Bitcoin Hodlers Are More Bullish Than Ever

Data shows that Bitcoin “HODLers” – a class of BTC investors focused on long-term holding – are more bullish than ever.

Rafael Schultze-Kraft of Glassnode shared a series of views, highlighting why on-chain data shows that Bitcoin is "extremely bullish in the long term." He said that the more Bitcoin HODLers hold, the less potential selling pressure there is.

Here are some of his points, which are backed up by on-chain data and charts:

• 61% of all Bitcoin in circulation has not moved in over a year;

• “The average annual Coin Days Destroyed (the age of coins that disappear each day, which is the number of Bitcoin transactions multiplied by the number of days left after the last transaction) has been decreasing and is currently at its lowest level since 2016.” This indicates that there are more long-term holders;

• The amount of Bitcoin held in exchange wallets has dropped dramatically over the past few years;

• Addresses believed to belong to HODLers are increasing their holdings of Bitcoin rather than selling.

#3: Analysts say the dollar will depreciate

Rob Koyfman, CEO of Koyfin and former Goldman Sachs vice president, said Bitcoin could benefit if the dollar depreciates relative to asset classes and other foreign currencies. He wrote in a recent article:

“The Fed’s commitment to extending quantitative easing could represent a significant turning point for the dollar. A break below [the recent close] would confirm a significant decline in the dollar with implications for the asset class…USD weakness could be a catalyst for Bitcoin to break out to new highs.”