Prelude to Bull Run: Bitcoin Hash Ribbons Signal Miner Capitulation Only Just Started

Tony "The Bull" Severino

5 years ago

3 mins read

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Hash rate is plummeting faster than Bitcoin’s price, suggesting that miners are starting to turn off their machines and await higher prices to return.

An indicator called Hash Ribbons is signaling that miners are only just beginning to capitulate. And while this could suggest more downside in the near term, once things return to normal, the lows act as the final shakeout before a new bull run begins.

Hash Ribbons Signal Miner Capitulation Has Only Just Begun

Bitcoin derives much of its value from its decentralized blockchain network, which is kept operating by a process called proof-of-work, where miners make complex computations that validate each block, keeping the network running and secure.

These miners act as the backbone to the overall supply and demand of the Bitcoin market. They drive the bulk of the supply flooding the market, as all Bitcoin ever sold originated from this process.

Miners aim to produce each Bitcoin resulting in each BTC generated being worth more in value than the cost required in energy to produce each BTC.

When operational costs run lower than the price of Bitcoin, miners are literally better off buying the cryptocurrency outright than continuing to operate at a loss.

That’s exactly what’s been happening after the latest cryptocurrency market collapse following peak coronavirus panic selling, according to a tool called Hash Ribbons.

Hash Ribbons are used to better understand the price of Bitcoin and its impact on miners.

The tool can help traders prepare for potential mass capitulation by miners, who would be selling their BTC stores, either cashing out their operations completely, or attempting to prepare for lower prices in the future by moving into cash now.

Even though Bitcoin has already crashed by a substantial margin in recent weeks, it’s only now that the Hash Ribbons are signaling that capitulation is starting across the mining industry.

Is This The Final Shakeout Before the Next Bitcoin Bull Run?

Miners with the highest production costs will be the first to turn off their rigs, which in turn caused mining difficulty to drop leveling out operating costs for those miners that remain.

This could lead to serious centralization in Bitcoin, however.

But Hash Ribbons signaling capitulation in miners historically wasn’t always a bad thing.

The last two instances of the occurrence resulted in large rallies, and during the last two Bitcoin bear to bull cycles, miners capitulated three times total before each new bull run began, with the third and final time each cycle being in close proximity to the halving.

After that, the process doesn’t restart until a new all-time high is set, and a yet another bear cycle begins. Could this be what’s next for Bitcoin?

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

Beyond his role at NewsBTC, Tony is the visionary founder of CoinChartist.io, an educational platform aimed at demystifying the nuances of cryptocurrency trading. CoinChartist.io serves as a valuable resource for traders seeking to enhance their technical analysis skills. The platform offers a range of learning tools and resources designed to empower traders with the knowledge to make informed trading decisions.

In addition to his educational initiatives, Tony is a prolific author and a dominant voice in the crypto community. He writes the CoinChartist VIP newsletter, a weekly dispatch that has become a staple among crypto enthusiasts, revered for its insightful analysis and actionable trading advice. This newsletter has consistently ranked as a best-seller on SubStack, boasting thousands of subscribers who rely on Tony’s expertise to guide their trading strategies.

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Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.