Bitcoin Hash Ribbons Buy Signal... Can It Be Trusted?

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Bitcoin (BTC)'s representative mining indicator, 'Hash Ribbons,' has flashed a buy signal, but debate over the reliability of this signal is reigniting.

According to crypto media outlet Bitcoinist on April 29 (local time), analyst Darkfost analyzed that with Bitcoin maintaining above $76,000, the Hash Ribbons indicator, which reflects miner activity, suggests a structural buying zone.

Hash Ribbons is an indicator that compares the 30-day and 60-day moving averages of Bitcoin's hashrate to determine if miners are actually under pressure. While current block rewards have significantly decreased to 3.125 BTC from the past 50 BTC, rising mining difficulty, energy cost burdens, and infrastructure risks are simultaneously at play, making mining profitability increasingly sensitive.

In this environment, if miners shut down equipment or exit the market, the hashrate decreases, and subsequently, with difficulty adjustments, the profitability of surviving miners recovers. The period during which selling pressure eases and the network normalizes is the traditional buying timing captured by Hash Ribbons.

However, some point out that this signal is difficult to interpret as mere optimism. Earlier this year, a similar buy signal occurred when mining facilities were temporarily shut down due to severe cold in some parts of the US, but this was an optical illusion caused by external factors, not economic capitulation. Similar 'false positives' have also occurred in cases like the 2021 China mining ban and June 2022.

Currently, Bitcoin is attempting a rebound near $77,500, with the $62,000-$65,000 range confirmed as a strong support level. However, a resistance zone formed by the convergence of the 50-week and 100-week moving averages exists in the $80,000-$90,000 range, suggesting that additional momentum is needed for an upward trend reversal. Trading volume has also decreased during the rebound, indicating cautious entry by investors.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*