Technical Indicator Flashes Bad News for BTC Miners

BTC

A tried and tested technical indicator is flashing bad news for BTC miners as a hash ribbon reversal spells a capitulation period ahead. Hash ribbons have just formed a death cross which has been a leading indicator for Bitcoin miner capitulation in previous cycles.

Hash Ribbon indicators use simple daily moving averages to identify changes in hash rate trends. They are often used as a long-term signal to indicate macro bottoms on the Bitcoin price chart.

A bearish cross is a signal of a strengthening downtrend which, in this instance, spells a reversal in hash rates which are still near their peak levels.

The signal was also observed by industry analyst Will Clemente who said, “we are potentially entering into a double dip miner capitulatory period,” before adding:

 “Hash ribbons have just initiated a bearish cross; historically, this has been a leading indicator of miner capitulation.”

The last time this death cross occurred was in June following the Luna collapse capitulation.

According to Glassnode, the hash rate seven-day moving average is now 13.7% off all-time highs. Furthermore, mining difficulty is projected to adjust by -9% a week from now.

Hash rates have tanked over the past week as more miners power down their rigs. The metric is currently down 14% from its all-time high earlier this month. Today’s hash rate is 234 EH/s (exahashes per second), according to Blockchain.com.

Mining difficulty, which measures the competition between miners for the next block, is at a peak of 36.9 T. However, this will automatically adjust downwards with the falling hash rate.

Profitability, or hash price as it is often known, is at its lowest ever level of around $0.056 per day per TH/s. This metric has slumped 82.5% over the past 12 months.

A miner capitulation usually adds more selling pressure which means a higher potential for more price declines in the short term.

Bitcoin prices are slightly up on the day, with the asset trading at approximately at the time of writing. There was another pullback in late Sunday trading, but Bitcoin has been consolidating in this range since the FTX-induced capitulation earlier this month.

BTC is currently trading at a two-year low, down 76.5% from its November 2021 all-time high. The current state of the market mirrors that of late 2018 following the November capitulation back then. There was no sign of recovery until the summer of the following year.

This Post Has One Comment

  1. gato io

    The point of view of your article has taught me a lot, and I already know how to improve the paper on gate.oi, thank you.

Leave a Reply

Contact Us

Disclaimer

Forex, Crypto, Options, and Binary Options have both large potential rewards and large potential risks. Therefore, before investing or trading any of the assets, ensure you are aware of and willing to accept the accompanying risks. Do not trade money you cannot afford to lose.

All Rights Reserved. None of the content of this website can be published elsewhere by any means without the prior consent of the owner(s). Please, check our terms & conditions and privacy policy before continuing to use this website.

This website and its owner(s) are not in any way liable for any incurred loss, whether caused by the information provided on this website or otherwise. The use of this website, including the content and information provided, is the user’s sole liability.