Bitcoin (BTC) is heading “much higher” as the classic on-chain metric calls for a resumption of the uptrend.
In its latest update on June 4, Bitcoin Quantitative Fund and digital asset fund Capriol Investments revealed “tempting” signals from the hashrebonnet metric.
Cabriole’s Edwards: ‘Chop tapes are back’
Bitcoin miners have had to readjust since block support was halved in April, and the hash rate – the total estimated processing power they allocate to the network – underlines this.
After reaching all-time highs in March, the Bitcoin mining hash rate has declined and is currently holding at a lower level. For Capriol founder Charles Edwards, this is standard behavior as miners come to terms with the new economic reality.
The result is that Bitcoin hash bars are entering a new “surrender” phase – a classic, if controversial, buy signal for Bitcoin.
“Hash Ribbons are back,” he summed up.
“Perhaps the best long-term Bitcoin buy signal is that Hash Ribbons are tempting us now with the current miner capitulation that began two weeks ago.”
The metric measures the 60-day moving average of the hash rate compared to its 30-day equivalent. Capitulation occurs when the latter falls below the former, indicating a slowdown.
“You will often see mining concessions coincide with mining closures, bankruptcies and buyouts. As in the current case, they are also often synchronized with Bitcoin halvings,” Edward explained.
“Bitcoin halving means that old and inefficient mining hardware becomes obsolete and is no longer profitable to mine (costs exceed block reward revenue). These mining rigs are usually phased out several weeks after the halving, causing hashrates to drop. Just like we see today.
Continuing, Capriol highlighted the relationship between weak hash bands and broader corrective conditions in BTC prices. However, in the long term, these periods are followed by a long-term upward trend.
The last capitulation took place in August 2023, when BTC/USD was trading at around $25,000.
“Hash Ribbons signs are either loved or ridiculed. “Each event raises a debate about its significance today, or why the current signal might not be significant,” Edwards wrote.
“This also happened in 2023, but the price was also trading at $20,000 when the last buy signal for Hash Ribbon occurred, suggesting that this metric still has predictive power today amazing.”
Data indicates that BTC price will “rise a lot”
As Cointelegraph continues to report, several on-chain indicators are giving rare bullish signals even nearly three months after Bitcoin price consolidation.
Related: Bitcoin Faces Major Resistance as Trader Highlights $100,000 BTC Price “Magnet”
Another analysis sees the classic post-halving “reaccumulation phase” underway – something that is again consistent with historical norms and generally leads to a continuation of the uptrend.
Edwards says overall geopolitical and macroeconomic conditions also favor cryptocurrencies.
He concluded by saying: “In this update, we have an amazing set of techniques and fundamentals that indicate Bitcoin is going much higher. »
“We are currently entering the summer months, which would normally be a period of financial recession. So it may be a while before the next rush kicks in, but given the available data, this is not likely either no longer necessary.”
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research before making a decision.
