On-chain data shows that the bitcoin Hash Ribbons are signaling that miners are still under immense pressure as their capitulation continues.
bitcoin hash tapes have yet to signal the end of miner capitulation
in a x.com/JA_Maartun/status/1809943798518108597″ target=”_blank” rel=”noopener nofollow”>mail On x, CryptoQuant community manager Maartunn shared what the latest trend in bitcoin hash rates looks like. The “hash rates” here refers to two moving averages (MA) of the bitcoin mining hashrate.
The mining hash rate measures the total computational power that miners currently have connected to the btc network. This metric can be considered a reflection of the situation between these validators on the chain.
When the hashrate value increases, it means that new miners are joining the network and old ones are expanding their capabilities. This trend implies that these chain validators now find the network attractive.
On the other hand, the indicator registering a decrease suggests that some miners have decided to disconnect from the blockchain, possibly because they consider it unprofitable to mine on it.
Miners play an important role in the network and these trends, if seen on a large scale, could have potential implications for bitcoin. The Hash Ribbons indicator helps identify whether a change in miner behavior is part of a larger pattern.
The two relevant ribbons for the indicator are the 30-day and 60-day moving averages of the hashrate. When the former crosses below the latter, miners can be considered to be undergoing capitulation. Similarly, a crossover of the opposite type implies that this cohort has become comfortable again.
Now, here is a chart showing the trend in bitcoin Hash Ribbons over the past year:
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/07/Bitcoin-Miners39-Capitulation-Still-On-Hash-Ribbons-Suggest.jpeg" alt="bitcoin Hash Tapes” width=”4000″ height=”2250″/>
The two lines seem to have witnessed a cross recently | Source: x.com/JA_Maartun/status/1809943798518108597/photo/1" target="_blank" rel="noopener nofollow">@JA_Maartun on x
As seen in the chart above, the 30-day MA of bitcoin mining hashrate crossed below the 60-day MA in May, signaling the start of miner capitulation.
This development of the Hash Ribbons was a confluence of the asset’s bearish momentum and the fourth Halving. The “Halving” refers to a periodic event that occurs every four years that halves btc block rewards.
Miners earn their income primarily through block rewards, so it's easy to see how the Halving would drastically impact the finances of these on-chain validators.
These rewards are awarded in btc, so the asset's falling exchange rate in dollars means a further reduction in dollar income for miners. Given these developments, it makes sense that miners have been disconnecting from the chain recently.
Last month, the Hash Ribbons briefly underwent a cross of the opposite type, but the indicator has since signaled capitulation again. It is difficult to say how long it will be before miners see the pressure ease.
btc Price
At the time of writing, bitcoin is trading at around $56,200, down more than 10% in the past seven days.
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Looks like the price of the asset hasn't made much recovery yet | Source: BTCUSD on TradingView
Featured image by Dall-E, CryptoQuant.com, chart by TradingView.com
