Bitcoin Set for Upswing as On-Chain Metrics Indicate Bullish Trend Resumption
Summary:
Bitcoin (BTC) is predicted to ascend again, based on a conventional on-chain metric, says Capriole Investments. As per the firm, Bitcoin's Hash Ribbons, a measure of the 60-day moving average of the hash rate against its 30-day equivalent, has descended into a new "capitulation" phase which traditionally stands as a BTC buy signal. Charles Edwards, Capriole's founder, suggests the current weakness of Hash Ribbons and broader BTC's corrective price conditions will likely lead to extended bullish momentum.
As per a conventional on-chain gauge, Bitcoin (BTC) is predicted to escalate, resuming the bullish trend. The recent update on June 4, by Capriole Investments, a quantitative Bitcoin and digital asset fund, implied appealing signals from the Hash Ribbons metric. Capriole's Edwards indicates, “Hash Ribbons is back".
Post the block subsidy halving in April, miners have regulated their operations, indicated by the deduced overall processing power extended to the network, also known as the hash rate. After peaking in March, the Bitcoin mining hash rate is presently in a consolidation phase. Capriole's founder, Charles Edwards, views this as characteristic behaviour as miners adapt to the fresh economy.
This results in Bitcoin’s Hash Ribbons descending into a new “capitulation” phase, which is often seen as a controversial BTC buying signal. The metric gauges the comparison between the 60-day moving average of the hash rate and its 30-day counterpart. Capitulation is witnessed when the latter goes below the former, indicating a slowdown.
The present Miner Capitulation, which started a fortnight ago, is enticing, as per Edwards. Capitulation often aligns with the closure of mining operations, insolvencies, and acquisitions. Frequently, they also concur with Bitcoin Halvings.
Drawing on the relationship between the weakness of Hash Ribbons and broader BTC's corrective price conditions, Capriole emphasizes that such periods often lead to extended upside momentum over the long term.
The previous capitulation event was in August 2023, with BTC/USD trading approx around $25,000. These Hash Ribbon signals are often debated and questioned for their relevance in the current scenario.
Different on-chain indicators are flashing rare bull signals as various reports denote, even after nearly a three-month consolidation of the BTC price. Other analysis indicates a classical post-halving “reaccumulation phase” underway. Edwards believes that geopolitical and macroeconomic conditions currently support crypto.
“This update we have incredible consistency of technicals and fundamentals which suggest Bitcoin is going a lot higher,” he concluded. “We are currently entering the summer months, typically a financial lull, so it may take some time to kick start the next impulse up, but given the data on hand that is also not a necessity.”
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Published At
6/4/2024 11:41:57 AM
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