Is Bitcoin Network Hashrate Related to Coin Price? Speculation on the Impact of Xinjiang Hashrate

On April 16th, the largest mining hub in China experienced a power outage, causing a more than 20% drop in Bitcoin's network hash rate. On the 18th, the currency market saw a significant decline. Renowned analyst Willy Woo believes there is a certain correlation between these events.

Willy Woo's View

Renowned analyst Willy Woo has stated that there has always been a correlation between price and hash rate. In the chart below comparing Bitcoin price and hash rate, he believes the decline is due to the shutdown in Xinjiang.

The chart shows a decline in hash rate (orange line) starting on the 16th, followed by a slowdown in Bitcoin price (grey line) from the 18th.

Willy Woo then references a case from 2017:

He illustrates a period of sudden hash rate decrease at that time, with a similar scenario occurring: the orange line first declines, followed by the grey line; attempting to prove the correlation between hash rate fluctuations and coin prices.

Regardless, he does bring some good news: hash rate is recovering. He mentions that in the past six hours, the hash rate has almost returned to its previous level.

No Dramatic Drop in Hash Rate Today!

Some opinions may attribute today's price drop to a sudden 18th hash rate decline, but it seems that the hash rate started declining three days ago. The Block's Research Director Larry Cermak even emphasizes this point, stating, "It's quite funny that some are saying the hash rate dropped by 40% today. There was no change in hash rate at all; this is a miscalculation. However, it is still about 20% below the recent hash rate peak."

He also lists the hash rate changes in various mining pools:

Overall, it appears that the hash rate is recovering. If hash rate changes do indeed correlate with coin prices, then it will be interesting to see the market's performance in the future.