On-chain data suggests Bitcoin miner capitulation may have ended as the Hash Ribbons indicator has printed a fresh buy signal. Bitcoin Hash Ribbons Have Seen A Bullish Crossover As highlighted by Capriole Investments founder Charles Edwards in a new X post, the Hash Ribbons has just given a signal for Bitcoin. The “Hash Ribbons” here refers to a metric created by Edwards that basically provides a representation of the miners’ situation. Related Reading: PEPE Explodes 62%, But Analyst Warns Of Breakdown Retest It does so by comparing two moving averages (MAs) of the “Hashrate,” an indicator that measures the total amount of computing power that the miners have connected to the network. When the value of this metric rises, it suggests existing miners are expanding their facilities and/or new ones are joining the blockchain. Such a trend implies these validators may be finding BTC mining to be an attractive venture. On the other hand, the indicator going down suggests some of the miners have decided to disconnect from the network, potentially because they are no longer able to break even on mining activities. The Hash Ribbons aims to pinpoint when one of these behaviors becomes dominant. The 30-day and 60-day MAs of the Hashrate play the role of the “ribbons” and their crossovers provide signals for shifts in miners’ condition. The 30-day MA moving below the 60-day one is considered to signal the start of a “miner capitulation.” In this phase, miners are under pressure and BTC may arrive at a bottom. The reverse crossover implies the return of conviction among miners, which has often been followed by bullish price action. Below is the chart for the Hash Ribbons shared by the analyst that shows the signals that Bitcoin has witnessed over the last few years. As is visible in the graph, the 30-day MA of the Bitcoin Hashrate fell below the 60-day ribbon last year as miners reduced their computing power in response to the bearish price action in the cryptocurrency. After a period of staying in the capitulation region, the reverse crossover has now finally occurred, meaning that the situation of the miners is improving, at least from the perspective of the Hash Ribbons. From the chart, it’s visible that this kind of “buy signal” occurred at some key points in the last few years. The recovery from 2022 bear market in 2023, for example, took place after a bullish crossover in the Hash Ribbons. The mini-bear phase in mid-2021 also broke with a buy signal from the indicator. Related Reading: Dogecoin Heading To $0.08? Analyst Thinks So—Here’s Why It now remains to be seen whether positive price action will also follow for Bitcoin after the latest signal. BTC Price Bitcoin has shot up over the last few days as its price has returned back to the $94,100 level. Featured image from Dall-E, charts from TradingView.com
After rising by more than 28% over the 16 days, the Bitcoin price was rejected at key resistance at $68,500 on Sunday. Since then, the BTC price is displaying a slight pullback, but according to Charles Edwards, the founder of Capriole Investments, investors can expect the bullish momentum to continue. Edwards shared the chart below and stated via X, “BREAKING: Hash Ribbon buy signal just fired.” Why The Bitcoin Hash Ribbons Matter This statement is significant, as the hash ribbons have historically been a reliable indicator, with an 84% accuracy rate in predicting Bitcoin’s major price bottoms. The hash ribbons are predicated on the interplay between the Bitcoin hash rate—the total computational power used to mine and process transactions—and Bitcoin’s market price. Related Reading: Is Bitcoin’s Recent ETF Inflow Surge a Setup for a Fall? What Traders Need to Know Analysts observe that a drop in Bitcoin’s price or an increase in operational costs, such as electricity, may cause miners to halt operations temporarily. This period, known as ‘miner capitulation,’ is crucial because a resumption in mining activity is typically viewed as a bullish signal for Bitcoin’s price. The indicator itself is derived from the moving averages of the Bitcoin hash rate; specifically, the 30-day and 60-day moving averages. A ‘Buy’ signal occurs when the shorter-term moving average crosses above the longer-term average after a period of miner capitulation, indicating that the worst of the sell-off may be over and a recovery phase is likely imminent. Crypto analyst Jelle, known on X as @CryptoJelleNL, commented, “Hash ribbons are showing that minor capitulation is over! This signal prints after every halving event, and after major corrections — and suggests the next leg of expansion is just around the corner. Time for 80k+?” Related Reading: Mt. Gox Creditors Begin Withdrawing Owed Bitcoin And BCH Funds Via Kraken Further supporting the bullish sentiment, the account @DaFinancialPage noted on X, “Miner Capitulation. The Hash Ribbons indicator’s blue buy signal has appeared 19 times. Of those, 16 marked Bitcoin’s macro low, giving it an 84% win rate. The 3 times it didn’t, a major correction followed.” Thus, the appearance of the hash ribbon ‘Buy’ signal can be interpreted as a strong indicator for the next bullish phase in Bitcoin’s market cycle. However, the three instances when the signal failed to predict a significant rise highlight the inherent risks and uncertainties with every indicator. Notably, technical analysis aligns closely with the anticipated target of $80,000 discussed by Jelle. The 1.272 Fibonacci extension is sitting at approximately $79,337. However, before a new all-time high can be explored, Bitcoin must secure support at the 0.618 Fibonacci retracement level at $65,943 in the daily chart, which could act as a critical juncture. Subsequent levels at the 0.786 Fibonacci at $69,384 and the 1.0 Fibonacci at $73,767 serve as potential interim targets. At press time, BTC traded at $66,403. Featured image created with DALL·E, chart from TradingView.com
On-chain data shows the Bitcoin mining revenue has neared its yearly average, a sign that capitulation could be coming to a close for miners. Bitcoin Miner Revenue Is Now Close To Its 365-Day SMA In a new post on X, analyst James Van Straten has discussed about how the situation of the BTC miners is […]
On-chain data shows the Bitcoin Hash Ribbons are signaling that the miners are still under immense pressure as their capitulation continues. Bitcoin Hash Ribbons Are Yet To Signal End Of Miner Capitulation In a post on X, CryptoQuant community manager Maartunn has shared what the latest trend in the Bitcoin Hash Ribbons has been looking […]