The statistics of Bitcoin (BTC) hashrate fluctuations tracked by Charles Edwards, founder of the Capriole Investments firm, say that the peak of miners' pessimism might be in.
Bitcoin (BTC) Hash Ribbon says miners' capitulation is over: Charles Edwards
Mr. Edwards has taken to Twitter to share that Hash Ribbon — an indicator of Bitcoin (BTC) miners' sentiment — prints bullish signals for the largest cryptocurrency.
Hash Ribbon buy signal!— Charles Edwards (@caprioleio) August 20, 2022
The #Bitcoin miner capitulation has officially ended today, making it the 3rd longest capitulation in history at 71 days.
This capitulation zone was longer than 2021, and just two days shorter than 2018's where price touched $3.1K pic.twitter.com/B3mMhKQPls
According to him, this period of miners' capitulation — the period when distressed miners are switching off their mining gear — is over. This capitulation was painful for the market as it was only two days shorter than the one that pushed the BTC price to $3,100 in the 2018 Crypto Winter.
Historically, Bitcoin (BTC) touched its major lows during miners' capitulations. Also, capitulations that coincide with the second halves of Bitcoin (BTC) mining cycles result in the most reliable bullish signals.
The second phase for this cycle started May 10, 2022; that makes the prediction by Charles Edwards very optimistic.
What is Hash Ribbon and why is this metric crucial?
The Hash Ribbon indicator was invented by Charles Edwards in 2019; he described the concept of this indicator in his Hash Ribbons & Bitcoin Bottoms essay.
This indicator is based on the correlation between the 30- and 60-day moving averages (MAs) of the Bitcoin (BTC) net hashrate, i.e., quantity of hashes calculated by all miners of the Bitcoin (BTC) network.
When 30 DMA drops below 60 DMA, analysts indicate miners' capitulation; the opposite situation takes place when capitulation is over. Secure bullish signals are registered when 30 DMA spikes above 60 DMA together with price increases.