Is the Bitcoin (BTC) Price on the Verge of a Massive Rally?

TL;DR

Bitcoin (BTC) has been experiencing a lack of significant gains recently, contrasting with the performances of several altcoins.
Factors such as MicroStrategy’s recent Bitcoin purchase and certain on-chain metrics suggest potential upcoming positive movement for BTC.
Bitcoin’s hash rate has reached a new all-time high, indicating increased network security and potential investor confidence, though it also brings the possibility of higher operational costs for miners.

Is BTC’s Consolidation About to End?

Unlike some alternative coins like Solana (SOL), Binance Coin (BNB), Polkadot (DOT), Polygon (MATIC), and more, Bitcoin (BTC) has failed to record any gains lately. Its price is currently below the $43,000 level (per CoinGecko’s data), charting a 3% decline on a weekly basis. This has also led to a significant drop in its market dominance, specifically over the past few days.

However, different factors hint that BTC could start rallying in the near future. One example is MicroStrategy’s latest Bitcoin buy. The company acquired an additional 14,620 BTC for approximately $615 million earlier this week, bringing its total holdings to 189,150 BTC. 

According to Santiment, that could trigger excitement across investors and propel a bull run – based on similar past activities. The analytics firm reminded that Bitcoin started a significant ascent shortly after MicroStrategy’s previous purchase at the end of November. Recall that its price stood at around $37,000 a month ago and soared above $44,000 a few weeks later.

Another development indicating a possible upswing for BTC in the near future is the latest exchange outflow. As CryptoPotato reported, more than 28,000 BTC (equaling over $1.2 billion at current rates) exited centralized trading venues on December 27, the highest amount in one year.

Shifting from exchanges toward self-custody methods could be considered bullish since it reduces the immediate selling pressure.

BTC Hash Rate Hits an ATH

Bitcoin’s hash rate – an indicator referring to the computational power utilized by miners to process and validate transactions on the BTC blockchain – has recently spiked to an all-time high of 544 exahashes per second (TH/s). The metric is still well above 520 TH/s despite slightly retracing in the following days.

An increased hash rate represents enhanced security of the BTC network, making it more resistant to attacks. Such a development could lead to more confidence among investors and a higher demand. It’s a fundamental economic principle that prices rise when demand outpaces supply. 

However, the opposite effect is also possible. Increased hash rate means high operational costs for miners, and some of them might decide to sell part of their stash to cover costs. In that case, supply would grow and could negatively affect the asset’s price.