Key Bitcoin Metric Flashes Bottom Signal as Mining Difficulty Hits New All-Time High
Bitcoin may have recently hit a local bottom, according to the Hash Ribbons indicator.Amid recent macroeconomic uncertainty, speculation has continued to mount over whether Bitcoin has topped out. According to one key metric, however, it might be quite the opposite.End of Miner CapitulationBitcoin may have recently hit a local bottom, according to the Hash Ribbons indicator. The Hash Ribbons indicator assumes that Bitcoin tends to hit a local bottom when miners capitulatesell their Bitcoin holdings to stay afloat or shut down as mining costs rise above profitability. This usually occurs when the asset price falls or running costs rise. The indicator offers Bitcoin buy signals by trying to pinpoint phases in this capitulation using the 30-day and 60-day hash rate moving averages.The hash rate refers to the computing power used by Bitcoin miners. This metric often rises when more miners join the network or expand operations, typically driven by a rise in the asset's price. On the other hand, the hash rate falls when miners shut down as profitability drops. When the 30-day hash rate moving average cuts below the 60-day moving average, i.e., the average hash rate trends lower in the short term due to miners logging off, miner capitulation is believed to have started, inducing selling pressure. On the other hand, when the 30-day MA cuts above the 60-day MA, it often signals the end of the worst of the miner capitulation, marking reduced selling pressure and the chance for a rebound. Per the chart, this capitulation kicked off in early February 2025 and was likely exhausted over the weekend. The last time it did in October 2024, Bitcoin kicked off an over 50% rally from below the $70,000 mark to $106,000 days later.
Text source: The Crypto Basic
