On-chain data indicates that Bitcoin miner capitulation may be over, as the Hash Ribbons indicator has issued a new buy signal.
The Hash Ribbons, a metric created by Capriole Investments founder Charles Edwards, has just signaled a shift for Bitcoin. This indicator tracks the state of miners by comparing two moving averages of the network’s hashrate, which measures the total computing power miners contribute.
A rising hashrate suggests miners are expanding operations or new participants are joining, indicating they find mining profitable. Conversely, a declining hashrate implies some miners are disconnecting, likely due to unprofitable conditions.
The Hash Ribbons uses the 30-day and 60-day moving averages of the hashrate to identify these shifts. When the 30-day average falls below the 60-day, it signals the start of a “miner capitulation” phase, often coinciding with market bottoms. The opposite crossover suggests renewed miner confidence, which has historically been followed by bullish price trends.
As shown in a chart shared by Edwards, the 30-day average dropped below the 60-day last year as miners scaled back during bearish price action. After an extended period of capitulation, the reverse crossover has now occurred, indicating improving conditions for miners.
Historically, similar buy signals have aligned with key market recoveries, such as the 2023 rebound from the 2022 bear market and the end of a mid-2021 downturn. It remains to be seen whether Bitcoin will see positive price action following this latest signal.
Meanwhile, Bitcoin’s price has surged in recent days, climbing back to around $94,100.
Frequently Asked Questions
FAQs Bitcoin Miner Capitulation The Hash Ribbons Buy Signal
BeginnerLevel Questions
1 What is miner capitulation in simple terms
Miner capitulation is when Bitcoin miners are forced to shut down their machines because its no longer profitable for them to operate This usually happens during prolonged price drops or periods of high network difficulty squeezing their revenue below their costs
2 What are Hash Ribbons
Hash Ribbons are a market indicator created by analyst Charles Edwards They track the health of the Bitcoin network by comparing the shortterm and longterm moving averages of the networks hashrate When these ribbons cross in a specific way it can signal major stress or recovery among miners
3 What does it mean when Miner Capitulation Ends
It means the period where unprofitable miners are giving up and turning off their rigs is largely over The miners who remain are the stronger more efficient operations This reduction in competition often leads to a decrease in network difficulty making it more profitable for the survivors and signaling that extreme selling pressure from miners may be exhausted
4 Why is the end of capitulation considered a potential buy opportunity
Historically the deepest points of miner stress have often coincided with major price bottoms When the weakest miners stop selling their newly mined Bitcoin to cover costs a major source of constant sell pressure is removed The Hash Ribbons indicator aims to identify when this transition from capitulation to recovery begins
Advanced Practical Questions
5 How does the Hash Ribbons indicator actually signal a buy
The classic buy signal triggers when the 30day moving average of Bitcoins hashrate crosses above the 60day moving average following a period where the 30day MA was below the 60day MA This crossover suggests the period of declining hashrate has ended and network health is recovering
6 Is this a perfect buy the bottom signal
No it is not perfect It is a probabilistic indicator based on historical patterns While it has identified significant bottoms in the past it can produce false signals or the price may still experience volatility after the signal triggers Its best used with other analysis