Bitcoin's Hash Ribbon Signals Potential Market Turnaround

The Hash Ribbon indicator, a key on-chain metric used to identify periods of miner capitulation and subsequent recovery, has recently issued a bullish signal for Bitcoin. This signal is based on the crossover of two moving averages—typically the 30-day and 60-day averages of Bitcoin’s hash rate. When the 30-day moving average crosses above the 60-day moving average, it suggests that any period of miner-driven distress may be over, indicating a potential turning point in the market.

Historically, major buy signals from the Hash Ribbon have often appeared after sharp market downturns, sometimes coinciding with cycle bottoms. While the indicator is not infallible, it has correctly identified several previous lows in Bitcoin’s history, including the 2011–2012 period, the depths of the 2014–2015 bear market, the $3k bottom of late 2018–early 2019, and the $29k region in mid-2021.

Following the latest crossover, several prominent figures in the Bitcoin community highlighted the event. Bitcoin Archive, a popular commentator, posted that the Hash Ribbon buy signal is one of the most reliable indicators, noting that significant price gains have followed seven out of the last seven times this indicator was triggered. The creator of the Hash Ribbon, Charles Edwards, retweeted this post, which many interpreted as an endorsement of the analysis. Another user added that the signal has flashed only 20 times in Bitcoin’s history, and 17 out of 20 times, the most recent local low was never violated on a closing basis, suggesting that the lows may have been reached and the price is likely to rise from here.

Jamie Coutts, chief analyst at Real Vision, emphasized the importance of monitoring multiple on-chain metrics, even as the Hash Ribbon flashes bullish. He noted that while on-chain activity remains sluggish, the metrics with the strongest historical correlation to future price performance are flashing green. However, many on-chain signals haven’t reached the levels of previous cycles, even when the Bitcoin price hit almost $110,000 in mid-January. Traditional technical signals also haven’t reached peaks of the past.

Tony Severino, a Chartered Market Technician and Head of Research at NewsBTC, has recently shifted from a bullish to a bearish stance on Bitcoin. Severino argues that Bitcoin’s price action and on-chain metrics no longer support the bullish narratives common in past cycles. He warns against expecting Bitcoin to replicate its historical pattern of pushing certain momentum indicators to extreme levels, noting that divergences—where price climbs to new highs but technical indicators fail to confirm those highs—can signal market exhaustion. Severino’s tools indicate a bearish outlook for Bitcoin.