Bitcoin (BTC) is heading “much higher” with traditional on-chain indicators calling for a resumption of a bull market.
In its latest update on June 4, Capriole Investments, a quantitative Bitcoin and digital asset fund, revealed “enticing” signals in its Hash Ribbon indicator.
Edwards on Capriole: “The hash ribbon is back”
Bitcoin miners have been forced to rebalance since the block subsidy halving in April, and the hashrate (the estimated total processing power they allocate to the network) confirms this.
After hitting an all-time high in March, the Bitcoin mining hash rate has cooled and is currently trending downward. For Capriole founder Charles Edwards, this is standard behavior as miners adapt to new economic realities.
As a result, Bitcoin’s hash ribbon has entered a new “surrender” phase. This may be controversial, but it is a classic BTC buy signal.
“The hash ribbon is back,” he summed up.
“Hash Ribbons, perhaps the best long-term Bitcoin buying signal, is now tempting us with the current miner capitulation that started two weeks ago.”
This indicator measures the 60-day moving average of the hash rate over its 30-day equivalent. Capitulation occurs when the latter falls below the former, indicating a slowdown.
“We often see miner surrenders synchronized with miner operational outages, bankruptcies and acquisitions. They are also often synchronized with Bitcoin halvings, as in the current case,” Edward explained.
“Bitcoin halving means that old, inefficient mining hardware will no longer be used and will no longer be profitable to operate (costs exceed revenues from block rewards). These mining rigs are typically phased out over the weeks following the halving, causing the hash rate to fall. It’s like what we see today.”
Capriole went on to highlight the relationship between Hash Ribbons’ weakness and broadly corrective BTC price conditions. But over the long term, these periods come with a long-term upside potential.
The last capitulation occurred in August 2023, when BTC/USD was trading around $25,000.
“Hash ribbon signals are either loved or ridiculed. Every incident sparks debate about its relevance today or why the current signal is not important,” Edwards wrote.
“This also happened in 2023, but when the last hashribbon buy signal occurred, the price was also trading at $20,000. This suggests that this indicator still has incredible predictive power today.”
Data suggests BTC price “will go much higher.”
As Cointelegraph continues to report, after nearly three months of BTC price consolidation, various on-chain indicators are flashing rare bullish signals.
Related: Bitcoin Fights Major Resistance as Traders Mark $100K BTC Price ‘Magnet’
Other analyzes see a typical post-halving “reaccumulation phase” underway, which is again consistent with historical norms and typically results in a continuation of the uptrend.
The overall geopolitical and macroeconomic situation also favors cryptocurrencies, Edwards says.
“With this update, we see an incredible convergence of technical and fundamentals that suggests Bitcoin can go much higher,” he concluded.
“We are currently entering the summer months, which are typically a financial lull, so it may take some time to start the next push, but it is not necessarily necessary given the data we currently have.”
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.