The hash ribbon indicator is an on-chain metric designed to identify the period of minor yield and subsequent recovery, and issued a bull signal to Bitcoin. Several well-known figures within the BTC community highlight the event through X’s posts, suggesting that the signal could mark a turning point in the market.
The ultimate Bitcoin purchase signal?
The hash ribbon, originally introduced by on-chain analyst Charles Edwards, relies on two moving averages (typically a 60-day and 60-day average of Bitcoin hashrates) to determine the difficulty of mining and when hash power hashed over surrenders and begins to recover. Traditionally, when a 30-day MA crosses more decisively than a 60-day MA, a “buy” signal is triggered, indicating that a period of miner-led pain may have ended.
Historical data shows that after a sharp market slump, major purchase signals often appear, sometimes matching the cycle bottom. The indicator is undoubtedly, but it correctly identified some previous lows in Bitcoin history. We have correctly identified the depth of the Bear market, particularly from 2011 to 2015, the $3K bottom of the late 2018 to late 2019, and the nearest 29K region in mid-2021.
Shortly after the latest crossover was triggered, popular commentator Bitcoin Archive posted:
Edwards, creator of Hash Ribbon, retweeted the post. This is a move that many interpreted as approval for analysis. In addition to the discussion, the user states: “The signal only flashed 20 times in Bitcoin history. The latest local lows were not violated on a termination basis.
Meanwhile, Real Vision’s chief analyst Jamie Coutts highlighted the importance of monitoring multiple on-chain metrics despite the bullish flashing of the hash ribbon.
Especially when Bitcoin prices reached nearly $110,000 in mid-January, many of the signals on the chains have not reached the level of previous cycles. Furthermore, traditional technical signals have not reached past peaks.
Tony Severino, a chartered market engineer (CMT) and research director at NewsBTC, recently changed from bullish to bearish stance on Bitcoin. Severino, who is also the founder of Coinchartist.io, claims that Bitcoin’s price action and on-chain metrics no longer support the bullish narratives that have been common in past cycles.
“The idea that Bitcoin must reach extremes with indicators is a dangerous idea. High prices and low high prices on oscillators are bearish signals,” Severino said recently.
Severino warns against hoping that Bitcoin will replicate the historical pattern of pushing certain momentum indicators (such as RSI or MACD) to extreme levels. Instead, he points out that prices rise to new highs, but technical indicators cannot confirm those highs – he points out that market fatigue can signal. “The tool I use is bearish,” he said via X.
At the time of pressing, BTC traded for $87,373.
Featured images created with dall.e, charts on tradingview.com
