Hash Ribbons Indicator confirms 10th buy signal in 9 years @ $7245

[dragonvslinux]

Updated December 26th 2019 with relevant back-testing and bullish setup, original post can be seen below:

Daily chart 2011-2015  - Reliably signaled bullish price movement following recovery of miner capitulation with price follow through:

Signals (2011-2013):
$4.08, December 27th 2011 (1)
$5.09, May 20th 2012 (2)
$6.46, June 22nd 2012 (3)
$20.55, February 2nd 2013 (4)



Daily chart 2015-2019 - recently signaled second buy of the year as highlighted in green:

Signals (2015-2019):
$234, January 28th 2015 (5)
$234, May 2nd 2015 (6)
$238 May 28th 2015 (7)
$612, September 4th 2016 (8)
$3652, January 11th 2019 (9)
$7245, December 27th 2019 (10)



Average of 1 buy signal per year in the past 9 years. 2 buy signals have occurred in the past 3 years.

Weekly chart - recently signaled second buy of the year as highlighted in green:

Signals (2011-2019):
$5.28, December 26th 2011 (1)
$6.35, June 18th 2012 (2)
$23.80, February 4th 2013 (3)
$227, January 26th 2015 (4)
$231, May 25th 2015 (5)
$3533, January 7th 2019 (6)
$7385, December 30th 2019 (7)



Average of 1 buy signal every 18 months in the past 9 years. 2 signals have occurred in the past 3 years.

Regarding the indicator, it is by default based on the 30 and 60 SMA's of hash rate. Therefore, as far as I understand with the coding:

• When the 30 initially crosses below the 60 (bearish) that creates the red area whereby the indicator signals the beginning miner capitulation (shown by the title "capitulation").
• When the 30 is rising back towards the 60, we see the red area shrink (as shown with the green dots), as capitulation is losing momentum.
• When the 30 is again trending downwards away from the 60 (that it previously crossed), we then see the transparent dots signalling continued "miner capitulation".
• When the 30 crosses back above the 60, indicating an exhaustion of miner capitulation, we then receive the "Buy Signal" (as shown above in blue)

after studying the source code of the indicator, it's clear that one requirement of the buy signal is bullish price movement, hence no buy signal from this indicator yet.

Just noticed the Monthly chart is now signalling a buy, although obviously the month would have to close at current prices for this to hold:
This would be the first buy signal since October 2016 at $709, as well as 7th buy signal in 9 years 

Original post:
Disclaimer: Don't shoot the messenger or indicator
I'm posting this not necessarily because I believe it will happen, but for educational purposes.
See related education: Bitcoin repeating history with descending triangle & other indicators TA series.



Source: Trading View, November 28th 2019.

The chart speaks for itself. The extrapolated price comes from the "2018 miner capitulation" that caused the price to drop 50%. Will we go back to $3,800? Unlikely, but clearly this is possible if the capitulation is as aggressive as 2018. Notably the VPVR is supporting the price target of $3,800, as is the extrapolation, with forecasted price for the block halving in May 2020 above $6K followed by another swift recovery and subsequent bull-run.

This isn't the first theory regarding price forming a higher low double bottom instead of holding the $5-6K area. As published last month, the 50 & 200 Day death cross [Part 10] also resulted in a 50% drop in price in 2014 and 2018, implying a 50% probability of such an outcome (using 4 sets of available data).

Credit to Willy Woo for the Bitcoin Difficulty Ribbon chart and the Hash Ribbons indicator by capriole_charles.

Buying during Miner Capitulation yields wonderful returns.

Top quotes:

Yup, you nailed it again...

Anyone who uses mining for price predictions turns into an instant prick in my book.

I can hardly find a worse indicator other than the number of horses that have taken a dump on the track at Kempton.

Honestly, it was a good call and the price kept on increasing, if you bought bitcoin one week ago and now sold you would have made 10% profit.

Disclosure: The author of this TA holds approximately 60% of wealth in cryptocurrency, 92% allocated to Bitcoin, and will continue to heavily accumulate between the $4.8K to $6.8K range, as well as for 6 months DCA leading up to the block reward halving until May 14th 2019.

Related/Recent TA:
When to buy the dip? The next swing low: February 6th-11th 2020 - February 2019
VPVR Volume Point of Control $8,188 Now Turned Support - January 2019
Extrapolating 2014 Correction: Could $6,500 Be The Low For Bitcoin?, December 2019
Two & Four Year MA's Claim It's Time To Accumulate Bitcoin, December 2019
Bitcoin Is Repeating History? TA Series On Repeating Past Patterns, September-October 2019
Dragonvslinux Technical Analysis: 3 Month Graphical Review

Own work: dragononcrypto

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[BigBos]

To see whether this prediction is true or not, we need to wait until December. If this December the price of bitcoin drops, it is very likely that this prediction will occur. but there is a difference between this year and 2018, namely halving that happened. I am pretty sure that current prices will last. it was proven when the price of bitcoin fell to the level of $ 6k, and then rose again. it made me think positively about this development.

[aardvark15]

A price of $3800 seems unlikely, but we should be prepared for the unexpected. It could happen but I try to see that as a buying opportunity. And I believe that we will see another big bull run starting next year.

[gentlemand]

What 2018 miner capitulation? Why should anyone other than miners give a fuck what it costs them?

Anyone who uses mining for price predictions turns into an instant prick in my book.

Why does it not work the the other way? Hash rates have been making constant all time highs while the price action has been largely dead.

[Tytanowy Janusz]

Bare in mind that in 2018 we broke 6000 support that was holding price for 9 months and we saw prices last seen one year ago. That was major reason for 50% price drop. Not "Miner Capitulation" what is an effect and not a reason for falling prices.

It is hardly unlikely to see the same output (50% price drop) with different market condition, price, volume, adoption, global situation with the only one constant (some miners quit mining).

[The Sceptical Chymist]

What 2018 miner capitulation?

Glad you asked, because I don't even know what that phrase means--not to mention what significance it has or why it might lead bitcoin to plummet to $3800.  That would be one hell of a drop, nearly 50% lower than where it currently is.  And if that were to happen, altcoins would probably get hammered even worse. 

It could happen but I try to see that as a buying opportunity.

You might see it that way and I might, too, but if bitcoin were to drop that much the market and a lot of investors and traders would be fleeing in droves.  It might be quite a while before we saw $7500 again and much, much longer before bitcoin sees its previous ATH of $20k or whatever it was.  I like buying opportunities but I'd prefer not to have as good an opportunity as that.  And I'm sure I'm not alone.

All that said, I don't think the market is headed back to the $3k range.  It's possible, true.  Probable?  I don't think so.

[danherbias07]

Just how many charts have you seen in this forum?
That is just one out of 100.

Some tells it could go to 50k and this is just the start which is being manipulated.
Maybe you could provide more proof next time.
Those who speculate at $100k have more proof that what you are posting right now.
Stop being an analyst and just take it that the market of bitcoin is far from being in command.

[boltz]

I think we should have hit 3k$ some days ago when the hash rate was at ATH. Now its seems that West hash power is trying to control the asian power which I doubt it could happen even if some asian mining farms are going for a pause. Remember that some miners are in long term as they can afford to pay for bills for the previous bull run as they're prepared for situation like this so if we go to 3k$ prepare for 2k$.
The worst scenario for all this is altcoins going down a lot and we could see big project announce collapse and I don't want to see a scenario like this so lets hope for better times ahead.

[Silberman]

A price of $3800 seems unlikely, but we should be prepared for the unexpected. It could happen but I try to see that as a buying opportunity. And I believe that we will see another big bull run starting next year.

A price that low will surely be unexpected and very improbable as well, as we know from watching the charts bitcoin has a very clear tendency to generate new higher lows, this basically means that after the bull market and the crash that inevitably follows the lowest point that bitcoin reaches is always higher than the previous one, the previous low was around 3000 and while a price of 3800 is higher than that it doesn't seem as high as what we have seen in the past.

[barota]

low prices already passed ; every time you wait for buying at cheap prices you will never buying before halving ; and after halving prices can rise a lot and market can have a ; big change like 2017 as all remember
i advice you buying at current prices because smart investors alreday starting for buying now

[exstasie]

What 2018 miner capitulation? Why should anyone other than miners give a fuck what it costs them?

Anyone who uses mining for price predictions turns into an instant prick in my book.

Some miners obviously capitulated. The drop in hash rate supports that theory. It's obvious why though: price dropped and their operations become unprofitable so they shut down.

Miners shutting down certainly didn't predict anything.

The extrapolation in the OP is pretty bizarre too. In 2018, we had a clear triangle breakdown that broke 8 months of horizontal support. There is no parallel on the 2019 chart. The OP just copied the 2018 bar pattern and randomly added it to the current chart.

[Febo]

Will we go back to $3,800? Unlikely, but clearly this is possible if the capitulation is as aggressive as 2018.

Why price of Bitcoin would act similar as in 2018 that come after monster bull year of 2017?  Was 2019 same as 2017? I see this year price of Bitcoin will maybe double while in 2017 it went up more then 10 times. Wake up man!

[figmentofmyass]

What 2018 miner capitulation?

Glad you asked, because I don't even know what that phrase means--not to mention what significance it has or why it might lead bitcoin to plummet to $3800.

this is what investopedia has to say:

What Is Capitulation?
Capitulation is when investors give up any previous gains in any security or market by selling their positions during periods of declines. Capitulation can happen at any time, but typically happens during high volume trading and extended declines for securities. A market correction or bear market often leads investors to capitulate or panic sell. The term is a derived from a military term which refers to surrender.

miners are fundamentally investors too---originally it was the only form of bitcoin investment, before there were liquid markets. when a mining operation is loss-making and the outlook is dire enough, the operator cuts their losses and capitulates just like any other investor.

the OP is suggesting that the 11/7 difficulty drop is the beginning of a trend.

All that said, I don't think the market is headed back to the $3k range.  It's possible, true.  Probable?  I don't think so.

the 200wma---which served as the bottom in 2015 and again in 2018---is around $5000 now. going back to the $3000s at this point would suggest that bitcoin's long term bull trend is dead.

[dragonvslinux]

Break-even stop loss* now in play, represented by the green line at $7486.25. Check OP for entry confirmation. Too easy  
I wasn't going to take this trade until I saw how bullish people's replies were in this thread, so thanks for that metric



Topic highlights:

Stop being an analyst and just take it that the market of bitcoin is far from being in command.

i advice you buying at current prices because smart investors alreday starting for buying now

The OP just copied the 2018 bar pattern and randomly added it to the current chart.

Wake up man!

See related bullish analysis:
Two & Four Year MA's Claim It's Time To Accumulate Bitcoin (03/12/19)

[dragonvslinux]

Got stopped out for break-even.

Break-even stop loss* now in play, represented by the green line at $7486.25.

Onto the next setup, probably this one with a new 3 Day candle opening tomorrow:



A move above $7800 would be very bullish for this chart, especially if it's a green 2 moving above a green 1.

[fabiorem]

Yes. Like I posted two days ago, we are going back to 3k levels.
Earlier on I believed the price would never return there, but after several weeks of lower highs, its evident the price will dump to that level again.

Actually I believe the manipulators who are dumping bitcoin want the price to go to $1000. They didnt succeed the last time, so they will try it again.

[Naficopa]

Yes. Like I posted two days ago, we are going back to 3k levels.
Earlier on I believed the price would never return there, but after several weeks of lower highs, its evident the price will dump to that level again.

Actually I believe the manipulators who are dumping bitcoin want the price to go to $1000. They didnt succeed the last time, so they will try it again.

Right now, it's not just about manipulators and whales. At this point, a lot depends on how the miners behave. If miners decide to sell BTC stocks (and among them there are certainly a few whales) this can cause big drops which will be a great time for price manipulators to lower the price even more. It looks like we might have one more big dump before halving.

[fabiorem]

Yes. Like I posted two days ago, we are going back to 3k levels.
Earlier on I believed the price would never return there, but after several weeks of lower highs, its evident the price will dump to that level again.

Actually I believe the manipulators who are dumping bitcoin want the price to go to $1000. They didnt succeed the last time, so they will try it again.

Right now, it's not just about manipulators and whales. At this point, a lot depends on how the miners behave. If miners decide to sell BTC stocks (and among them there are certainly a few whales) this can cause big drops which will be a great time for price manipulators to lower the price even more. It looks like we might have one more big dump before halving.

They will have to sell, to pay mining costs.
The exchanges are to blame for this. If they had a consensus in putting limits to the price, such dumps would not happen.

The worst it can happen now its governments stepping in to stop the manipulation, and putting several regulations which would cripple the market even more. People love to go to extremes, so its wild west on one side, and a statist dystopia on the other.

By the looks of it, we will have a replay of the "despair" phase on the classical cycle chart. This will confirm the theory of the four-year cycle is not valid at all, and each cycle would need to be stretched.

[Naficopa]

Yes. Like I posted two days ago, we are going back to 3k levels.
Earlier on I believed the price would never return there, but after several weeks of lower highs, its evident the price will dump to that level again.

Actually I believe the manipulators who are dumping bitcoin want the price to go to $1000. They didnt succeed the last time, so they will try it again.

Right now, it's not just about manipulators and whales. At this point, a lot depends on how the miners behave. If miners decide to sell BTC stocks (and among them there are certainly a few whales) this can cause big drops which will be a great time for price manipulators to lower the price even more. It looks like we might have one more big dump before halving.

They will have to sell, to pay mining costs.
The exchanges are to blame for this. If they had a consensus in putting limits to the price, such dumps would not happen.

The worst it can happen now its governments stepping in to stop the manipulation, and putting several regulations which would cripple the market even more. People love to go to extremes, so its wild west on one side, and a statist dystopia on the other.

By the looks of it, we will have a replay of the "despair" phase on the classical cycle chart, where the "takeoff" phase was the 3k in August 2017. This will confirm the theory of the four-year cycle is not valid at all, and each cycle would need to be stretched.

I also think that this period will extend. I think the 2020 period will be something like "no mans land" and proper price increases will not start until 2021.

[figmentofmyass]

At this point, a lot depends on how the miners behave. If miners decide to sell BTC stocks (and among them there are certainly a few whales) this can cause big drops which will be a great time for price manipulators to lower the price even more. It looks like we might have one more big dump before halving.

isn't that always the case? miners are just bitcoin investors/holders. you're basically just saying that you expect whales to dump.

the negative sentiment around here is tangible!

They will have to sell, to pay mining costs.

we actually don't know the extent to which this is true. we know that bitmain stockpiles their mining rewards for very long periods of time. poorly capitalized and/or leveraged mining operations need to sell to cover overheads, but the industry is becoming increasingly well-capitalized and industrial. so i don't know how useful these assumptions are.

The exchanges are to blame for this. If they had a consensus in putting limits to the price, such dumps would not happen.

i prefer free markets to collusion among exchanges.