In brief
Bitcoin’s funding rate turned negative to -1.8%, its lowest since 2023—a historically bullish signal according to VanEck analysts.
Hash rate recovery after three recent decline episodes suggests favorable conditions ahead, the analysis shows.
Bitcoin’s price rose above $79,000 this week for the first time since January.
After Bitcoin popped to its highest price since January earlier this week, VanEck analysts said Friday that they continue to see bullish on-chain signals around the leading cryptocurrency, with historically profitable conditions emerging across key metrics.
Bitcoin’s hash rate currently sits at a 30-day moving average of 985.5 EH/s, down 7.5% from its all-time high of 1,065.7 EH/s set in late November, according to the report from VanEck analysts Matthew Sigel and Patrick Bush. The network weathered three sustained decline episodes in just the past five months.
The most recent episode ended April 15 after 16 days with a peak decline of 6.7%. Such drawdowns have proven bullish historically, with six of seven hash rate decline episodes resulting in Bitcoin trading higher 90 days later, posting a median gain of 37.7%.
The analysis also highlights negative funding rates as a powerful indicator. Bitcoin averaged 11.5% returns during 30-day periods with negative funding since 2020, compared to 4.5% overall returns. When funding dropped below -5%, returns jumped to 19.4% on 30-day periods and 70% on 180-day horizons.
Current transfer volume sits at $48.5 billion daily, representing the 81st percentile but down 5% month-over-month as positioning flux declined alongside reduced volatility.
Beyond on-chain metrics, Bitcoin exchange-traded products experienced a dramatic sentiment reversal. After five consecutive weeks of outflows totaling $4 billion from January 24 through February 21, spot Bitcoin ETPs shifted to net positive flows in six of the last seven weeks through April 11. The turnaround suggests institutional appetite for Bitcoin exposure rebounded following the initial post-launch volatility period.
The firm has tracked similar patterns in previous market cycles, with the combination of hash rate drawdowns and negative funding rates preceding significant price appreciation.
Bitcoin is down about 0.8% on the day as of this writing, recently trading at $77,397. The price of the leading cryptocurrency popped above the $79,000 mark on Wednesday, with the coin up more than 11% in the last 30 days per CoinGecko data.
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