Bitcoin indicator shows buy signal

Hash Ribbons: Bitcoin indicator shows buy signal

The Hash Ribbons indicator shows a buy signal for Bitcoin investors. This is the first time in five months.

An „elegant“ Bitcoin (BTC) metric, which predicted a price of $12,000 in August, shows an upward trend for the first time since July.

As its creator, Charles Edwards, explained on 3 December, the Hash Ribbons indicator is now giving a buy signal by Bitcoin System for the Bitcoin market.

Hash Ribbons shows rare „blue dot

Edwards, who is also the founder of the digital asset manager Capriole, uploaded an annotated chart on social networks and pointed out similarities between the current and past uptrends at Bitcoin this year.

„Look what I found. A blue dot,“ he commented, indicating a buy signal.

Hash Ribbons are based on the hashrate behaviour of the Bitcoin network and are designed to tell investors when the price will rise. The forecast is based on empirical values.

Theoretically, the hash rate decreases if the miners capitulate due to events such as a major price correction. But it then recovers again thanks to Bitcoin’s automated difficulty adjustments. Hash ribbons show that about the middle of this Miner capitulation is an optimal time to buy.

With Bitcoin, it says, „the price follows the hash rate“. The Hash Ribbons provide the technical proof for this popular mantra.

The „blue dot“ that Edwards refers to occurs when the 30-day hashrate crosses the 60-day hashrate. This signals that a recovery is underway.

„Hash Ribbon will soon give a buy signal“, says Rafael Schultze-Kraft, technical director of the on-chain analysis website Glassnode. On this occasion he posted another chart.

„When the hash rate recovers (30-day MA crosses the 60-day MA) and the BTC price momentum is positive, Hash Ribbons have always indicated excellent buying opportunities“.

Schultze-Kraft described the Hash Ribbons as „elegant“ in terms of the reliability of the indicator. In July, when the last „blue dot“ appeared, Bitcoin reached highs in just a few weeks that it had not recorded for over a year.

Bitcoin consolidates below $20,000

Bitcoin is currently still below USD 20,000. It has shown considerable volatility after falling just above its all-time high.

Selling pressure remains high. If it manages to overcome the resistance, Bitcoin could climb to the next resistance at $22,000, as the data from the stock exchange order books show.

At the time of going to press, the BTC/USD pair was around $19,300. So far, it has not managed to climb above 19,500 US dollars again.