A mining indicator of Bitcoin which preceded several large price rallies of the cryptocurrency has been seen flashing again. Glassnode, the Blockchain analytics platform, recently came upon a golden cross between the moving averages of 30 days and 60 days of the hash ribbon of BTC.
In theory, however, such a crossover does indicate that the price momentum has been switching all the way from negative to positive. For the uninformed, hash ribbons are basically based on the network of the cryptocurrency and are specifically designed to inform investors when the price of the coin will turn upwards.
Hash ribbon fractals predict Bitcoin bull runs
It should come as no surprise to anyone that most Bitcoin miners earn less in U.S. dollar terms during the price corrections of the cryptocurrency. In order to pay for their operational costs, the miners then sell their newly minted BTC to increase capital.
Also, they have a tendency to shut their machines down to reduce the costs of operation- which leads to a rapid decline of the hash rate in the cryptocurrency network. Nevertheless, the hash rate then recovered later due to the automatic difficulty readjustments that BTC is famous for. This, in turn, reduces the mining cost.
Recent reports have stated that the price of Bitcoin has generally followed the hash ribbon signals. One example would be the supply squeeze event that took place in December 2020 which went on to coincide with the 30 days moving average of the hash ribbon. The closing bid for the cryptocurrency that month was $28,990, which went on to surge to a rate of $62,971 on the 14th of April.
Interestingly, the exodus of the mining community in China has also seen the hash rate of Bitcoin plunged from 180.66 million terahashes per second on the 11th of May, to a rate of 84.79 million TH/s by July.
