The latest trend in the Bitcoin “Hash Ribbon” indicator has created a pattern that has historically been a buy signal for crypto.
BTC Hash Ribbon signals ‘buy’ as miner capitulation ends
The BTC miner surrender phase took 71 days. Now an analyst on Twitter says that the miner capitulation ends today. Before trying to understand what the Hash Ribbon indicator does, it’s worth taking a look at the ‘hash rate’ metric.
The hash rate is a measure of the total computing power connected by miners to the Bitcoin Blockchain. In bear markets, the income of some miners falls sharply. In this case, it becomes unprofitable for them to run their operations. At such times, their only option is to shut down their machines, whose hash rate is recorded as a downtrend. In past bear markets, often large numbers of miners were quickly off-line due to low revenues. The main bottoms also occurred during these periods of miner capitulations.
An indicator for detecting these miner capitulation times is the Hash Ribbon. This metric was designed by analyst Charles Edwards. The metric uses two different moving averages of the hash rate, the 30-day MA and the 60-day MA, to note changes in miner behavior. Here is a chart showing the trend in Bitcoin Hash Ribbons over the past few years. According to the chart, the 30-day SMA hash rate is just above the 60-day SMA version.
As you can see in the chart above, Bitcoin miner capitulation times are marked using the Hash Ribbon indicator. If the hash strength drops below the 60-day MA line of the 30-day MA version, it indicates that the miners have started a capitulation phase.
Rare “most profitable” buy signal for Bitcoin!
On the other hand, a break of the 30-day MA above the 60-day MA marks the end of capitulation. This type of surrender ends the crossover of Hash Ribbons. When this occurs, a buy signal for crypto explodes. But even among these buy signals there are some particularly profitable ones. Such signals are formed following miner capitulations that occur 2 years after any halving event.
Today, the last run of the miner’s capitulation ended after 71 days. So, Hash Ribbons once again drew the historical pattern of the buy signal. Also, more than 2 years have passed since the last halving event. This shows that this is one of the rare “most profitable” buy signals for Bitcoin, according to the past trend.
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