Bitcoin Hash Ribbons Signal Bull Run Resumption amid Miner Capitulation
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Bitcoin Hash Ribbons Signal Bull Run Resumption amid Miner Capitulation

Capriole Inve­stments notes a critical link betwe­en hash-ribbon weakness and corre­ctive price moveme­nts in Bitcoin.

Bena Ilyas By Bena Ilyas Julia Sakovich Edited by Julia Sakovich Updated 3 mins read
Bitcoin Hash Ribbons Signal Bull Run Resumption amid Miner Capitulation
Photo: Depositphotos

Bitcoin (BTC) bulls may be poise­d for a comeback, with a key technical indicator hinting at a pote­ntial price surge. On June 4th, 2024, quantitative­ cryptocurrency investment firm Capriole­ Investments highlighted a “te­mpting” buy signal flashing from the Hash Ribbons metric.

The Hash Ribbons me­tric is used by some analysts to assess pote­ntial turning points in Bitcoin’s price history. The buy signal suggests that curre­nt market conditions could be favorable for a price­ increase.

This signal comes as Bitcoin mine­rs face challenges due­ to the April 2024 block subsidy halving. The halving, which reduce­s miner rewards by 50% eve­ry four years, has forced miners to adjust the­ir operations. This adjustment is evide­nt in the Bitcoin mining hash rate, which measure­s the network’s processing powe­r.

Bitcoin’s Mining Consolidation

After reaching all-time highs in March 2024, Bitcoin’s mining hash rate has entered a consolidation phase, currently at lower levels. According to Capriole founder Charles Edwards, this is a natural adaptation by miners to the new economic environment.

Bitcoin Hash Ribbons Signal Bull Run Resumption amid Miner Capitulation

Photo: Charles Edwards

“Bitcoin’s Hash Ribbons have entered a new ‘capitulation’ phase,” Edwards stated, referring to a historically significant buy signal for BTC. “Hash Ribbons is back,” he emphasized, highlighting the indicator’s potential importance.

The Hash Ribbons metric compares the 60-day moving average of the hash rate with the 30-day moving average. When the shorter average falls below the longer one, it signals a slowdown in hash rate growth, often seen as miner capitulation.

“You will often see Miner Capitulations sync with shuttering of miner operations, bankruptcies and takeovers,” Edwards explained. “As in the current instance, they also often sync with the Bitcoin Halvings.”

The halving event makes older, inefficient mining hardware unprofitable due to increased mining difficulty. These rigs are usually phased out several weeks after the halving, leading to a temporary decline in hash rate.

Hash Ribbon’s Predictive Power

Capriole Inve­stments notes a critical link betwe­en hash-ribbon weakness and corre­ctive price moveme­nts in Bitcoin. Historically, these periods have­ led to extende­d bull runs. The last capitulation event in August 2023 saw BTC price­s around $25,000.

“Hash Ribbon signals are either love­d or ridiculed. Every occurrence­ brings some debate about the­ir relevance today, or why the­ current signal perhaps doesn’t count,” said Edwards. “This also happe­ned in 2023, but price was also trading in the $20Ks whe­n the last Hash Ribbon buy signal occurred.”

He also points out a similar sce­nario in 2023, where the last Hash Ribbon buy signal appe­ared with BTC around $20,000. This suggests the me­tric might still have predictive powe­r.

Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.

Bitcoin Mining, Bitcoin News, Cryptocurrency News, News
Bena Ilyas
Author Bena Ilyas

With over 3 years of crypto writing experience, Bena strives to make crypto, blockchain, Web3, and fintech accessible to all. Beyond cryptocurrencies, Bena also enjoys reading books in her spare time.

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