Digital asset fund Capriole Investment in an update on June 4, stated that the Bitcoin hash ribbon metric displayed tempting signals.
According to the report, Bitcoin miners are adjusting their positions since the halving in April. Notably, Bitcoin’s mining hash rate has dropped after rising to all-time highs in March.
Founder of Capriole, Charles Edwards believes that this behavior is normal as miners seek to adjust to the new economic state.
Consequently, the Bitcoin Hash Ribbons are dropping into a new capitulation phase. This is often viewed as a buy signal for BTC traders.
Bitcoin Hash Ribbons Signals Possible Uptrend
`Source: X
According to Charles Edwards, the Hash Ribbons are the best long-term Bitcoin buy signal available.
Also, he stated on X, that every time a Hash Ribbon buy occurs it is ignored. However, he noted that the last one occurred when Bitcoin was trading in the $20,000 price range.
Therefore, Edwards believes that it is time for investors to pay attention to the Hash Ribbon by signal.
Notably, the Hash Ribbon measures the 60-day moving average of the hash rate against its 30-day equivalent.
So, capitulation occurs when the 30-day MA drops below the 60-day MA signaling a slowdown.
The Implications Ahead
Notably, Edward reveals that miner capitulations go hand-in-hand with bankruptcies and takeovers.
Also, the Bitcoin halving implies that old mining hardware loses its relevance and is no longer profitable.
This means that the cost of operating the mining rig exceeds the revenue realized from the block reward.
So, these old mining rigs are phased out over several weeks which often results in declining hash rates.
Additionally, Carpriole focused on the relationship between the Hash Ribbon’s weakness and BTC’s price.
However, in the long term, it is often followed by a rally for Bitcoin. Notably, the last capitulation event occurred in August 2023 when the BTC/USD pair traded around $25,000.
So, Bitcoin is likely set for another massive uptrend and the current accumulation phase is another indicator of the bullish sentiment.
Notably, Bitcoin’s price is slightly below $70,000 today June 4 confirms strong support from the buyers. If it rallies above $70,000 then the uptrend will likely begin.
