Is Bitcoin's Increasing Hash Rate a Bull Flag?

The coin's climbing hash rate may tell a different tale.

Despite being engulfed in red, Bitcoin's hash rate steadily climbs.

Guessing at hundreds, thousands, or millions of calculations to solve a block - a mining unit's hash rate reflects the number of guesses it can make in any given second when completing one of Bitcoin's computational puzzles.

All in the face of falling prices, fervor for mining Bitcoin has only inflated.

Many consider an increasing hash rate to be a precursor of healthy price action.

While this may be counterintuitive, the explanation is simple: Bitcoin's hash rate may be considered one of the stronger indicators of sentiment.

Seen alongside sinking prices, a descending hash rate would be considered a bad omen by most - miners jumping ship as they lose faith in the coin's value.

Granted, recent additions may constitute a percentage of Bitcoin's climbing hash rate - newcomers that have no grounds in forecasting price action.

Monolithic outfits such as BTC.com - which alone accounts for 23.5% of all Bitcoin mining power - continue full steam ahead. Equipped with highly efficient ASIC mining units, these industrial firms often enjoy the rewards of a "Scale of economy" - several firms recording multi-billion-dollar profits in 2017.

In addition to upholding the integrity of the Bitcoin network, mining activity may be considered a shrewd glimpse into the future of the coin.