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
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:
like
the
two
ribbons
have
gone
through
a
cross
recently
|
Source:
CryptoQuant
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
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.
price
of
the
asset
appears
to
have
seen
a
small
surge
over
the
past
day
|
Source:
BTCUSD
on
TradingView
Featured
image
from
Vasilis
Chatzopoulos
on
Unsplash.com,
CryptoQuant.com,
chart
from
TradingView.com
Go to Source
Author: Keshav Verma
