Bitcoin Hash Ribbons Form Capitulation Signal: What It Means

On-chain data shows the Bitcoin Hash Ribbons have recently gone through a crossover. Here’s what it could mean for the cryptocurrency. Bitcoin Hash Ribbons Suggest Miner Capitulation Is On As explained by CryptoQuant community manager Maartunn in a Quicktake post, miners are capitulating right now if the Hash Ribbons indicator is to be believed. This on-chain metric is generally used to determine whether miners are in distress. BTC runs on a proof-of-work (PoW) consensus mechanism where miners play the role of validators and compete against each other using computing power to get a chance to add the next block to the chain. This computing power, when measured across the network, can provide insight into the health of the miners as a whole. Due to this reason, the Hash Ribbons indicator makes use of this total Bitcoin “Hashrate” to judge the situation of the miners. Related Reading: Bitcoin Price Linked To Binance Vs Coinbase Battle, Quant Reveals Naturally, a rise in the Hashrate suggests the network is attracting miners right now, while a decline could imply low profitability is making some of these validators pull out from BTC. The Hash Ribbons indicator uses two moving averages (MA) of the Hashrate, 30-day and 60-day, to represent whether these behaviors are particularly intense or not at the moment. When the 30-day ribbon moves under the 60-day one, it suggests that miners are mass capitulating. On the other hand, the opposite cross suggests network is observing growth again. Now, what relevance do these trends have for Bitcoin? According to Charles Edwards, the creator of the Hash Ribbons, the miners have historically been quite resilient, and they only quit when things get especially bad for the cryptocurrency. As such, the market may be more likely to approach a bottom whenever these chain validators show capitulation. Below is a chart that shows how the miners’ behaviour has looked recently according to this indicator: As Maartunn has highlighted in the graph, the Bitcoin Hash Ribbons have seen a crossover recently. More specifically, the cross has involved the 30-day moving under the 60-day, implying that the miners are capitulating. Miner profits come down to three factors: BTC spot price, transaction fees, and electricity costs in the area that they are located in. Historically, the fees has been quite low in comparison to the block rewards, so miner financials have been dependent on the price (as the block rewards only have this variable attached to them) and electricity prices. Recently, the BTC price has been stuck in consolidation while the block rewards have been slashed in half in the latest Halving event. This has led to tightening revenues for these chain validators, so it’s not surprising to see that the miners with the least efficient machines have already started ditching the network in hordes. Related Reading: Newbie Bitcoin Whales Buying 200,000 BTC Per Week, Data Shows In the chart, past instances of miner capitulation are shown with the green lines. It’s visible that while miner capitulation has generally indeed occurred near profitable buying points into the asset, these bottoms haven’t immediately appeared after the crossovers have occurred. As the analyst notes, “It unfolds in the subsequent days and weeks after less efficient miners throw in the towel.” BTC Price Bitcoin has continued to move overall flat over the past week as its price is still trading around $62,700. Featured image from Vasilis Chatzopoulos on Unsplash.com, CryptoQuant.com, chart from TradingView.com

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Bitcoin Short-Term Holders Panic Capitulate $2.6 Billion In BTC Crash

On-chain data shows that Bitcoin short-term holders have panic sold $2.6 billion worth of coins in the crash following the new all-time high. Bitcoin Short-Term Holders Have Sent Huge Volume In Loss To Exchanges As analyst James V. Straten explained in a new post on X, Bitcoin short-term holders have shown signs of capitulation during the latest drop in the cryptocurrency’s price. The “short-term holders” (STHs) refer to the BTC investors who bought their coins within the past 155 days. The STHs make up one of the two main divisions of the market, the other one being the “long-term holders” (LTHs). Related Reading: Solana Open Interest Plunges 20%: What It Means For Price Statistically, the longer an investor holds onto their coins, the less likely they are to sell at any point. This means that the STHs, who are relatively new hands, generally sell quickly whenever an asset crash or rally occurs. The LTHs, on the other hand, usually show resilience, only selling at specific points. One way to track whether either of these groups is selling is through the transfer volume they are sending to exchanges. First, here is a chart that shows the trend in the Bitcoin exchange inflow volume precisely for the STHs in loss: The value of the metric appears to have shot up in recent days | Source: @jvs_btc on X As displayed in the above graph, the Bitcoin STHs have transferred around $2.6 billion worth of coins in loss to exchanges in the past day, implying that some members of this cohort have capitulated. This spike is huge, but it’s less than the loss-taking event that took place back during the price drawdown that followed the BTC spot exchange-traded fund (ETF) approval. These loss sellers would be those who FOMO’d into the rally that took BTC to a new all-time high beyond the $69,000 level, but their conviction wasn’t strong enough that they were able to hold past the sharp crash that BTC observed shortly after. The STHs aren’t the only ones who have exited the market in this latest price volatility; it would appear that the LTHs have also done some selling. The difference, however, is that these HODLers have made profits. The chart below shows how the exchange transfer volume for the LTHs in profit has looked like recently. Looks like the value of the metric has registered a sharp spike recently | Source: jvs_btc on X The graph shows that the Bitcoin LTHs have participated in their largest profit-taking event since July 2021, transferring tokens worth $1.5 billion to exchanges. Related Reading: Bitcoin Sets New All-Time High Above $69,000 As Institutionals Show FOMO Thus, it would appear that this recent volatility has shaken up the conviction of even some of the diamond hands, although these HODLers have at least still been rewarded with profits. BTC Price At the time of writing, Bitcoin is trading around the $65,800 mark, up 8% in the past week. BTC has gone through a rollercoaster in the past couple of days | Source: BTCUSD on TradingView Featured image from cdd20 on Unsplash.com, Glassnode.com, chart from TradingView.com

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Bitcoin records biggest negative hash rate adjustment in a year

The Hash Ribbon, an indicator for determining miner capitulation based on when the market reaches a bottom, ended on August 18 after 2 months of dwindling miner participation.

The post Bitcoin records biggest negative hash rate adjustment in a year appeared first on CryptoSlate.

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Bitcoin Holders Show No Panic Loss Selling, What Does It Mean?

On-chain data shows that Bitcoin investors aren’t participating in any significant amounts of loss selling right now. Here’s what it may mean. Bitcoin Entity-Adjusted Realized Loss Has Remained Low Recently According to data from the on-chain analytics firm Glassnode, coins transacted recently were mostly acquired close to the current spot price. The relevant indicator here [...]

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Here’s How Current Bitcoin Capitulation Compares With Past Crashes

On-chain data shows that Bitcoin short-term holders are depositing 0.82% of their supply to exchanges. Here’s how these inflows compare with past crashes. Bitcoin Short-Term Holder Inflows Have Been Elevated Recently The BTC market can be divided into two broad investor groups, one of which is the “short-term holder (STHs) cohort.” The STHs are investors [...]

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