As a seasoned crypto investor with several years of experience under my belt, I’ve learned to pay close attention to technical indicators that have historically proven to be reliable in predicting Bitcoin’s price movements. The hash ribbons are one such indicator that I’ve come to trust.
As an analyst, I’ve observed a significant increase of over 28% in Bitcoin‘s price over the past 16 days. However, on Sunday, this upward trend encountered rejection at a crucial resistance level of $68,500. Since then, there has been a subtle pullback in the BTC price. Nevertheless, according to Charles Edwards, the founder of Capriole Investments, we should anticipate the bullish momentum to persist. Edwards highlighted the chart below and expressed via X, “Exciting update: The Hash Ribbon buy signal has just been triggered.”
Why The Bitcoin Hash Ribbons Matter
The hash ribbons hold great importance due to their proven track record, having correctly signaled Bitcoin’s major price bottoms with an impressive accuracy of 84%. These ribbons are based on the relationship between Bitcoin’s market price and its hash rate, which represents the total computational power required for mining and processing transactions.
Experts note that when Bitcoin’s price decreases or mining costs, like electricity expenses, rise significantly, miners might temporarily suspend their operations. This stage, referred to as ‘miner capitulation,’ is important because the restart of mining activities is often seen as a positive indicator for Bitcoin’s price growth.
As a researcher studying Bitcoin’s market trends, I’ve discovered an intriguing indicator based on its hash rate moving averages. More precisely, this indicator is calculated using the 30-day and 60-day moving averages. When the shorter-term average rises above the longer-term one following a prolonged period of miner distress, a ‘Buy’ signal emerges. This event may suggest that the worst of the market downturn has passed, paving the way for an imminent recovery phase.
Jelle, a well-known crypto analyst on the X platform under the handle @CryptoJelleNL, remarked that “the hash ribbons indicate that the minor sell-off has ended. This sign appears following every halving and significant corrections, hinting at an upcoming growth phase. Could we be looking at prices over $80,000?”
Based on my extensive experience and deep dive into the cryptocurrency market, I strongly believe that the recent statement made by the account @DaFinancialPage adds significant weight to the optimistic outlook for Bitcoin. The Hash Ribbons indicator, as mentioned, has given a blue buy signal 19 times in the past. Remarkably, 16 of those instances have marked the crypto asset’s macro bottom, which translates into an impressive 84% win rate.
In simpler terms, finding the “Buy” hash ribbon in Bitcoin’s chart can be taken as a clear sign that a bullish trend is on the horizon. Nevertheless, past occurrences where this signal didn’t lead to substantial price increases serve as reminders of the potential risks and uncertainties associated with using any indicator for investment decisions.
Significantly, Jelle’s predicted price target of $80,000 for Bitcoin aligns closely with the current position of the 1.272 Fibonacci extension, which is around $79,337. However, prior to reaching new record highs, Bitcoin needs to reclaim the 0.618 Fibonacci retracement level at $65,943 in the daily chart as a crucial support point. Following this, potential intermediate objectives can be found at the 0.786 Fibonacci level ($69,384) and the 1.0 Fibonacci level ($73,767).
At press time, BTC traded at $66,403.
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2024-07-24 22:18