June 5, 2024
Bitcoin's at $69,028 Hash Ribbons Show Buy Signal Since $25K
Bitcoin price today

Bitcoin’s at $69,028, Hash Ribbons Show Buy Signal Since $25K

Tuesday, June 4, 2024: Bitcoin Price Today is $69,028, projected to surge significantly higher, driven by a classic on-chain metric that signals the resumption of a bull run. In a recent update on June 4, Capriole Investments, a quantitative Bitcoin and digital asset fund, revealed “tempting” signals from the hash ribbons metric.

Source: TradingView

Bitcoin miners have had to adjust since the block subsidy halved in April. This adjustment is confirmed by the hash rate, which is the estimated aggregate processing power miners dedicate to the network. After reaching all-time highs in March, the Bitcoin mining hash rate has cooled and is currently consolidating lower. According to Charles Edwards, founder of Capriole, this behavior is standard as miners adapt to the new economic reality.

“Perhaps the best long-term Bitcoin buy signal there is, Hash Ribbons is now tempting us with the current Miner Capitulation which started two weeks ago.”

Hash Ribbons Indicate Miner Capitulation

The result of these adjustments is that Bitcoin’s Hash Ribbons have entered a new “capitulation” phase, which is a classic, albeit controversial, BTC buy signal. Edwards succinctly put it: “Hash Ribbons is back.”

The hash ribbons metric compares the 60-day moving average of the hash rate against its 30-day equivalent. Capitulation is signaled when the latter drops below the former, indicating a slowdown. Edwards explained, “You will often see Miner Capitulations sync with shuttering of miner operations, bankruptcies, and takeovers. As in the current instance, they also often sync with the Bitcoin Halvings.”

“The Bitcoin Halving means that old, inefficient mining hardware becomes obsolete and no longer profitable to run (costs exceed revenue from the block reward). These mining rigs will typically then be phased out over several weeks following the Halving resulting in falling hash rates. Just as we are seeing today.”

Bitcoin Hash Ribbons chart. Source: Charles Edwards

Capriole further highlighted the relationship between hash ribbons’ weakness and broader corrective BTC price conditions. Historically, such periods are followed by extended upward movements. The last capitulation event occurred in August 2023, when BTC/USD was trading at around $25,000.

“This also happened in 2023, but price was also trading in the $20Ks when the last Hash Ribbon buy signal occurred, suggesting this metric still has incredible predictive power today.”

Long-term Bullish Signals and Market Conditions

“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,” Edwards noted. Despite the debate, various on-chain indicators continue to flash rare bull signals, even after nearly three months of BTC price consolidation.

Other analyses suggest that Bitcoin is currently in a classic post-halving “reaccumulation phase.” This phase aligns with historical patterns and typically results in a continuation of the upside. Additionally, overall geopolitical and macroeconomic conditions are favorable for crypto, as Edwards pointed out.

BTC/USD chart with Fibonacci retracement levels (screenshot). Source: Capriole

“This update we have an incredible confluence of technicals and fundamentals which suggest Bitcoin is going a lot higher,” he concluded. The combination of technical metrics and favorable broader market conditions suggests that Bitcoin may be on the brink of a significant upward movement.

“We are currently entering the summer months, typically a financial lull, so it may take some time to kick start the next impulse up, but given the data on hand that is also not a necessity.”

Image by Igor Schubin from Pixabay

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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