Bitcoin keeps hitting ATH, and mining indicators suggest it's just the beginning

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Bitcoin Bitcoin had an extraordinarily strong week, hitting all-time highs (renewed at $68,800 today). As the…

Bitcoin content doesn't stop hitting ATH, and mining indicators suggest it's just the beginning first appeared on Cointimes.

Bitcoin

Bitcoin had an extraordinarily strong week, hitting all-time highs (renewed at $68,800 today).

As the price of Bitcoin rises, long-term holders are selling a very small fraction of their holdings, as is typically observed in all previous cycles.

On the sell side, the ones that are selling now are mainly sardines.

Mining hashrate and dollar revenue are approaching new highs.

This combination of strong supply dynamics, mining network recovery and relatively low network activity points to a very constructive outlook for Bitcoin in the coming weeks.

hash ribbon

The Hash Ribbon is a market indicator that assumes Bitcoin tends to bottom out when Bitcoin becomes too expensive to mine relative to the cost of mining.

The hash range indicates that the worst of it ends when the 30-day Moving Average of the hash rate crosses above 60d MA (swap from light red areas to dark red).

The moments when this happens and the price dynamic changes from negative to positive have been shown to be good buying opportunities (when it changes from dark red to white).

The hash range indicator makes use of the hash rate to determine if miners have capitulated. Miner capitulation occurs when the costs of mining are greater than the rewards. This can best be seen by adding a 30-day and 60-day MA to the hash rate.

Hash Ribbon (BTC) | Source: Glassnode

A negative cross between these two MMs is represented on the graph by a shift to a light red area when mining costs outweigh rewards.

Once the difficulty sets in, a return to profitability is seen by a shift to a dark red and eventually white area.

The indicator turned dark red from May 17th to June 3rd. Historically, these shifts from light to dark red have provided great buying opportunities. This was also the case in June 2022, when the BTC reached a local fund.

The hash rate is calculated every day.

Bitcoin Difficulty Ribbon Compression

The “difficulty range” is an on-chain indicator that uses moving averages (MM) of bitcoin mining difficulty.

Tape compression difficulty adds a standard deviation to this indicator. Historically, values between 0.01 and 0.05 (highlighted in green) indicate funds.

Historically, there have been three periods when tape compression difficulty dropped to the top of a range after such a peak.

Difficulty Ribbon Compression | Source: Glassnode

The first took place in 2012-2013 (black circles). The return to the upper part of the range marked the bottom before another upward movement.

The second time happened in 2015-2016 (blue circles). Likewise, indicator values have moved to the upper part of the range before a rally.

The third instance took place in 2019-2020 (red circles). Although the price of the BTC continued to decline after returning to the range, an upward movement has finally started. However, it lags behind the two previous times this has occurred.

Therefore, when looking at historical readings for this indicator, it is likely that the BTC is in the early stages of a full-scale rally.

This indicator is calculated every two weeks.

In summary, if history is anything to go by, the BTC could be in the early stages of a significant upward movement.

Will we see new records ahead?

Read more:

  • New 2nm chip from IBM could revolutionize cryptocurrency mining
  • Meet 5 politicians who surrendered to Bitcoin
  • Brokerage reports 29% decline in cryptocurrency trading volume in Q3

Bitcoin content doesn't stop hitting ATH, and mining indicators suggest it's just the beginning first appeared on Cointimes.

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