Bitcoin is currently trading above $21k after falling nearly 20%, getting rejected from the $25k level. And now, when you might think we would see another pullback, Bitcoin’s most important buy signal just got triggered. I am talking about the ‘hash ribbon’ indicator that has given profitable trades to many investors. Now, it is up to you whether to buy or not based on a signal; however, past data shows maybe you should.
Bitcoin ‘hash ribbon’ indicator
The ‘hash ribbon’ indicator takes into account the hash rate of Bitcoin. It is a measure of the total computing power that secures the Bitcoin blockchain network. So, a higher hash rate means better security, but it also increases the mining difficulty. As a result, for small miners, it can also become non-profitable to mine BTC, and so they go offline.
During such capitulation phase, when BTC’s hash rate declines rapidly, we also see a decline in price. And the capitulation or decline is indicated by the hash ribbon indicator. Whenever we see a hash ribbon in red, it indicates a sell signal, and when it turns green, that’s a buy. Historically, following this one indicator has proven to be quite accurate. While it could take some time for the rally to take off, we can be bullish about this.
The buy signal happens when the 30-day moving average cuts the 60-day moving average from the bottom and moves up. In contrast, when it cuts it from the top and moves down, that’s a sell signal. There is a possibility that it doesn’t play out exactly the same way every time, but it’s at least important to keep an eye out for the same.
Bitcoin rally in h2 2022
Even Mike McGlone, a senior analyst from Bloomberg, said that he expects crypto markets to recover in the second half of 2022. And now we also got a buy signal from the Bitcoin hash ribbon indicator. Is this an indication that a rally is coming? Probably not! This is my personal opinion, but I still feel we are yet to see the market bottom and one more major pullback before the rally.
What are your thoughts as Bitcoin’s most accurate buy signal goes off? And do you think we will see a recovery in h2 2022? Let us know in the comments below. And, if you found our content informative, share it with your friends.
Also Read:Â ETC hashrate hits new all-time high as Ethereum merge nears.