03 Dec 2020 #Bitcoin
Hash ribbons tell investors to buy BTC again for the first time in five months as BTC price consolidates below $20,000. An “elegant” Bitcoin (BTC) metric that predicted its run to $12,000 in August has flashed bullish again for the first time since July.
As noted by creator Charles Edwards on Dec. 3, the Hash Ribbons indicator is now signaling for buyers to enter the Bitcoin market.
Uploading an annotated chart to social media, Edwards, who is also the founder of digital asset manager Capriole, noted similarities between Bitcoin now and before the previous bullish upticks throughout this year.
“Look what I found. A blue dot,” he commented, identifying the new entry point.
Hash ribbons are based on Bitcoin’s network hash rate behavior and designed to tell investors when price is due to experience upside.
In theory, when miners capitulate due to events such as a major price correction, hash rate declines, only to revive thanks to Bitcoin’s automated difficulty readjustments. Hash ribbons demonstrate that around midway through this miner capitulation is an optimal time to take positions.
As the saying goes, “Price follows hash rate” in Bitcoin, hash ribbons lend technical proof to the popular mantra. Edwards’ “blue dot” occurs when the 30-day hash rate value crosses the 60-day value, indicating a recovery is underway.
“Hash Ribbon is setting up for a buy signal soon,” Rafael Schultze-Kraft, chief technical officer of on-chain analytics resource Glassnode, continued with a further chart. “When hash rate recovers (30d MA crosses above 60d MA) and BTC price momentum is positive, Hash Ribbon has given excellent entry points.”
Schultze-Kraft described hash ribbons as “elegant” for the indicator’s reliability. In July, the time of the previous “blue dot” event, Bitcoin took a matter of weeks to post highs not seen in over a year.
The signal comes as Bitcoin continues to range below $20,000, having seen considerable volatility while getting rejected at just above all-time highs.
Major selling pressure remains, while conversely, successfully overcoming resistance would give Bitcoin a clean sweep to the likely next level of resistance at $22,000, exchange orderbook data shows.
At press time, BTC/USD circled $19,300, having been unable thus far to retake $19,500.
Get cryptocurrency price predictions, forecasts with analysis and news right to your inbox.
© 2015-2021 Crypto-Rating.com
The usage of this website constitutes acceptance of the following legal information. Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website, including information about the cryptocurrencies and bitcoin is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Crypto Rating shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about cryptocurrencies. The entire responsibility for the contents rests with the authors. Reprint of the materials is available only with the permission of the editorial staff.