Bitcoin Hash Ribbons Signal First Buy Since $25K BTC

Bitcoin is set for significant growth as a well-known on-chain metric suggests the bull run is about to resume. In an update on June 4, Capriole Investments, a quantitative Bitcoin and digital asset fund, shared promising signals from the Hash Ribbons metric.

Capriole’s founder, Charles Edwards, announced, “Hash Ribbons is back.” Bitcoin miners have had to adapt following the block subsidy halving in April. This change is evidenced by the hash rate, which measures the total processing power miners dedicate to the network. After peaking in March, the hash rate has decreased and is now stabilizing at a lower level.

According to Edwards, this adjustment is typical as miners adapt to new economic conditions. This has led to Bitcoin’s Hash Ribbons entering a new “capitulation” phase, a traditional but often debated buy signal for BTC. Edwards explained, “Hash Ribbons is now tempting us with the current Miner Capitulation which started two weeks ago.”

The Hash Ribbons metric assesses the 60-day moving average of the hash rate against its 30-day counterpart. When the 30-day moving average falls below the 60-day average, it signals a slowdown. Edwards pointed out that miner capitulation often aligns with miners shutting down operations, going bankrupt, or being taken over. Such events frequently coincide with Bitcoin Halvings.

Edwards further elaborated that Bitcoin Halvings render old, inefficient mining equipment obsolete, as the costs of running these rigs exceed the revenue generated from block rewards. Consequently, these outdated machines are phased out over several weeks post-halving, causing a decline in hash rates, which is currently being observed.

Capriole also noted the correlation between Hash Ribbons downturns and broader BTC price corrections. Historically, these periods of weakness are followed by extended bullish trends. The previous capitulation event occurred in August 2023 when BTC/USD was around $25,000.

Edwards acknowledged that Hash Ribbons signals are often polarizing. Each occurrence sparks debate about their current relevance or why the latest signal might be different. This skepticism also arose in 2023, yet BTC was trading in the $20,000 range when the last Hash Ribbon buy signal emerged, indicating that this metric remains a powerful predictive tool.

Various other on-chain indicators are also pointing to rare bull signals, even after nearly three months of BTC price consolidation. Some analysts see this as a classic “reaccumulation phase” following the halving, which historically leads to price increases.

Geopolitical and macroeconomic conditions are also favorable for cryptocurrency, according to Edwards. He concluded, “This update shows a remarkable confluence of technical and fundamental factors suggesting Bitcoin is poised for significant gains. Although the summer months usually see a financial lull, the data we have indicates that an upward move could happen even sooner.”