The Bitcoin Hash Ribbon metric did a good job of indicating a buying opportunity.
But the recent market downturn, caused by the FTX crash, has changed direction.
- As explained by Charles Edwards of Capriole Investments, the metric takes into account both BTC mining difficulty and hash rate to determine miners’ capitulation.
- Since the former adjusts itself every two weeks, while the latter does so daily, there may be some time differences. This is why Edwards advised people to look at Hash Ribbon as a long-term model. post reads,
When the 1-month simple moving average of retail price crosses During The 2-month simple moving average of the hash rate, usually the worst miner capitulation ends, and the recovery has begun. Buying at these times leads to amazing results.”
- The price of BTC rose by as much as 4 digits in several months after this cross occurred earlier.
- However, this has not been the case so far. Miner capitulation has been a hot topic in the community lately, especially since the formation of Death Cross in late November.
- As such, Dan Lim of CryptoQuant determined that “for the first time since the golden cross of the hash bar model, the Dead Cross has reached below the Bitcoin price rally.”
- He attributed this to the massive and noisy crash of FTX, which eventually led to a significant drop in BTC prices to a two-year low.
- The hash rate decline, coupled with the expected decrease in mining difficulty, indicates that BTC may indeed face miner capitulation.
Bitcoin hash tape measure first published after FTX Crash first appeared on CryptoPotato.