How Can Changes in the Hash Rate Be Interpreted as a Leading Indicator for Cryptocurrency Price Movements?

A rising hash rate indicates that more miners are investing capital in hardware and energy to secure the network. This investment suggests growing confidence in the cryptocurrency's long-term value and future profitability.

Traders often interpret a sustained increase in hash rate as a bullish signal, viewing it as a leading indicator of positive fundamental health. Conversely, a sharp decline can signal miner capitulation and potential price weakness.