Bitcoin flashes indicator that often precedes higher prices: CryptoQuant

According to analysts at on-chain data and analytics platform CryptoQuant, this signals the end of Bitcoin miner capitulation, as indicated by the popular Hash Ribbons indicator.

The analysts’ comments regarding Bitcoin’s (BTC) potential for a new rally come as the flagship cryptocurrency retested the $59,000 level. However, the cryptocurrency has struggled over the past week, with the BTC price falling below $60,000 after encountering resistance in the $62,400 area.

Hash rate reaches all-time high

While bears remain a threat, CryptoQuant’s latest write-up on the possible price scenario for BTC suggests that an injection of upward momentum is likely in the coming months. The analytics platform notes that Hash Ribbons, an indicator used by traders to identify “periods of stress in the mining market,” are signaling a potential bottom.

Hash Ribbons signal the end of miner capitulation ⛏️

Hash Ribbons are a popular indicator that highlights periods of stress in the mining market. It uses the 30 and 60-day moving averages of the Hash Rate and has signaled the end of miner capitulation.

This makes sense… resim.twitter.com/pokqp9ccev

— CryptoQuant.com (@cryptoquant_com) August 19, 2024

Hash Ribbons uses the 30- and 60-day moving averages of the Bitcoin hash rate to highlight this possibility. The end of miner capitulation coincides with the network hash rate reaching an all-time high of 638 exahashes per second.

“Miners are starting to use more efficient equipment, repowering their machines and becoming less likely to sell.”

CryptoQuant Hash Ribbons ‘usually’ precede price spikes

Bitcoin is set to undergo its fourth halving in April 2024, with the block reward being reduced from 6.25 BTC to 3.125 BTC. Prices rose ahead of the halving, reaching a new all-time high above $73,000, before miner capitulation and other negative catalysts pushed BTC lower.

CryptoQuant described the flashing of Hash Ribbons for the first time since the halving as a “healthy signal.”

“While the indicator is not designed to determine the exact price floor, it often precedes higher prices by signaling a decrease in selling pressure from miners.”

CryptoQuant

At the time of writing, Bitcoin is trading around $59,086.