The Bitcoin Hash Ribbons have crossed over, which is a significant shift in the network that is shown by new data from the Bitcoin blockchain. Things that happen now might change how the coin moves in the future.
Maartunn, who is in charge of the community at CryptoQuant, wrote an interesting Quicktake post: the Hash Ribbons sign means that miners are giving up at the moment. Checks the health of the network as a whole by measuring its “Hashrate,” or total computing power. It is often used to see how upset miners are.
Proof-of-work (PoW) is the consensus process that makes Bitcoin work. Miners compete to add new blocks to the blockchain and confirm transactions. The Hash Ribbons indicator uses two moving averages (MA) of the hashrate—the 30-day MA and the 60-day MA—to show when miners are working hard or giving up. When the 30-day MA goes below the 60-day MA, there is a crossover, which means that a lot of miners may be giving up.
Market’s Bitcoin Turmoil Potential
Charles Edwards, who made the Hash Ribbons indicator, says that miners giving up usually happens at the same time as big drops in the cryptocurrency market, which can be a sign of a possible bottom. The latest crossing over seen in the Bitcoin Hash Ribbons suggests that miners may be giving up, which could mean hard times ahead for the cryptocurrency.
A lot of things affect miners’ ability to generate funds, such as the spot price of Bitcoin, transaction fees, and the cost of energy. Since Bitcoin’s price has stayed the same and block payouts were cut in half during the recent Halving event, miners are making fewer profits. Recent data on the blockchain shows that this has caused a lot of less efficient miners to leave the network.
When Bitcoin miners gave up in the past, it was often an excellent opportunity to buy Bitcoin. But keep in mind that market bottoms typically do not happen right away. They usually happen days or weeks after a big event. From what we know about the past, the effects of mines giving up tend to happen slowly over time.
Even with all of these things going on, the price of Bitcoin has stayed around $62,700 for the past week. Hash Ribbons have crossed over again, which makes me think that the cryptocurrency market may become even more volatile in the next few days.
