Popular crypto trader Altcoin Psycho says he’s preparing to place a big bet on Bitcoin once a fundamental metric flips his way.
The pseudonymous analyst tells his 275,800 Twitter followers that Bitcoin’s hashrate – which is a measure of all of the computing power in the Bitcoin network – is the key factor to follow.
“Out of all the ‘bottom’ signals, in my opinion the most reliable is hashrate recovery after miner capitulation (see the green x’s on the chart) Right now miners are capitulating.
Hashrate recovery hasn’t happened yet, but when it does that’s when I’ll be buying with size.”
BitInfoCharts indicates Bitcoin’s hashrate has fallen to its lowest level since late October 2020, when Bitcoin was trading around $13,000.
The drop in hashrate is due to China’s recent crackdown on crypto mining operations. On Friday, regulators forced crypto mining operations in the Sichuan province to shut down, Reuters reports.
This week, China’s third-largest bank, the Agricultural Bank of China, issued a statement prohibiting the use of its services for virtual currency transactions following instructions from the People’s Bank of China (PBOC) to crack down on mining and trading activities.
Bitcoin’s price has fallen nearly 15% on the week and was briefly trading under $30,000 on Tuesday. It is trading at $32,775.47 at time of writing, according to CoinGecko.
While waiting for the BTC hashrate to recover, Altcoin Psycho says he is just trading the range.
“Still following a simple trading plan right now. So far these levels have given us a perfect short scalp and long scalp opportunity. I’ll keep playing these ranges until it stops working.”
The trader accurately called the end of the 2017 bear market in April of 2019, as Bitcoin began an ascent from about $4,000 to its all-time high of $64,800.
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Featured Image: Shutterstock/Tithi Luadthong
