After surging by over 28% in 16 days, bitcoin price was rejected at the key resistance of $68,500 on Sunday. Since then, btc price is showing a slight pullback, but according to Charles Edwards, the founder of Capriole Investments, investors can expect the bullish momentum to continue. Edwards shared the chart below and stated via x: “BREAKING: Hash Ribbon Buy Signal Just Triggered.”
Why bitcoin Hash-Ribbons Matter
This claim is significant, as hash-ribs have historically been a reliable indicator, with an 84% accuracy rate in predicting major bitcoin price lows. Hash-ribs are based on the interaction between bitcoin’s hash rate (the total computational power used to mine and process transactions) and the market price of bitcoin.
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Analysts note that a drop in bitcoin's price or an increase in operating costs, such as electricity, can cause miners to temporarily halt operations. This period, known as “miner capitulation,” is crucial because the resumption of mining activity is often seen as a bullish signal for the bitcoin price.
The indicator itself is derived from the moving averages of bitcoin’s hash rate; specifically, the 30-day and 60-day moving averages. A “buy” signal occurs when the short-term moving average crosses above the long-term average after a period of miner capitulation, indicating that the worst of the sell-off may be over and a recovery phase is likely imminent.
Cryptocurrency analyst Jelle, known on x as @CryptoJelleNL, x.com/CryptoJelleNL/status/1816003837301264475″ target=”_blank” rel=”nofollow”>commented“Hash tapes show that minor capitulation is over! This signal is printed after every halving event and after major corrections, and suggests that the next stage of expansion is just around the corner. Is it time for 80k+?”
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To further support the bullish sentiment, the @DaFinancialPage account x.com/DaFinancialPage/status/1816055049740579203″ target=”_blank” rel=”nofollow”>noted On x, “Miners capitulation. The blue buy signal from the Hash Ribbons indicator has appeared 19 times. Of these, 16 marked bitcoin’s macro low, giving it a win rate of 84%. The 3 times it didn’t, a major correction occurred.”
Therefore, the appearance of the ribbon-shaped buy signal can be interpreted as a strong indicator of the next bullish phase in the bitcoin market cycle. However, the three instances where the signal failed to predict a significant rise highlight the risks and uncertainties inherent in each indicator.
Notably, the technical analysis aligns closely with the anticipated target of $80,000 discussed by Jelle. The 1.272 Fibonacci extension is located at approximately $79,337. However, before a new all-time high can be explored, bitcoin must secure support at the 0.618 Fibonacci retracement level at $65,943 on the daily chart, which could act as a critical juncture. Subsequent levels at the 0.786 Fibonacci level at $69,384 and the 1.0 Fibonacci level at $73,767 serve as potential interim targets.
At the time of writing, btc was trading at $66,403.
Featured image created with DALL·E, chart from TradingView.com