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

[gentlemand]

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.

If that causes them to thicken and engorge then more power to them. Sounds jolly expensive to me.

This latest difficulty change has levelled out at just over 5% below the ATH hash rate that's despite the price being over 20% lower than it was at that time. Looks like they've taken it in their stride not that anyone should care in the slightest.

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[stompix]

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.  

As usually people trying to find a connection out of nothing when the reality was totally different!

The extrapolated price comes from the "2018 miner capitulation" that caused the price to drop 50%.

First, miners follow the price, not the price of the miners.
What OP forgets to add in his prediction or in his analysis is that the price was going down since June, when the hash rate reached the 30exa to which it will drop during November.
Also, he has chosen to ignore the fact that hashate jumped again to pre "crisis" levels in March while the price was still hovering around 4000$ and that was not triggered because miners dictate the price but the fact that second batch of s17 and m20 started to be delivered.

That drop could be blamed on the bulk of s9's reaching the limits of profitability while at the same time farms were refitting their gear (the first batch of s17 was delivered in late October) and right now just doubling numbers is stupid, at side by side electricity costs and thinking that 3500 was some sort of "capitulation" for the older gear the next "capitulation" can't happen until we go below 6000 at the current hash rate.

This latest difficulty change has levelled out at just over 5% below the ATH hash rate that's despite the price being over 20% lower than it was at that time. Looks like they've taken it in their stride not that anyone should care in the slightest.

And we're still up 20% on a 90 days time frame while the price is down 25%
I can hardly find a worse indicator other than the number of horses that have taken a dump on the track at Kempton.

[dragonvslinux]

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.  

As usually people trying to find a connection out of nothing when the reality was totally different!

The extrapolated price comes from the "2018 miner capitulation" that caused the price to drop 50%.

First, miners follow the price, not the price of the miners.
What OP forgets to add in his prediction or in his analysis is that the price was going down since June, when the hash rate reached the 30exa to which it will drop during November.
Also, he has chosen to ignore the fact that hashate jumped again to pre "crisis" levels in March while the price was still hovering around 4000$ and that was not triggered because miners dictate the price but the fact that second batch of s17 and m20 started to be delivered.

That drop could be blamed on the bulk of s9's reaching the limits of profitability while at the same time farms were refitting their gear (the first batch of s17 was delivered in late October) and right now just doubling numbers is stupid, at side by side electricity costs and thinking that 3500 was some sort of "capitulation" for the older gear the next "capitulation" can't happen until we go below 6000 at the current hash rate.

This latest difficulty change has levelled out at just over 5% below the ATH hash rate that's despite the price being over 20% lower than it was at that time. Looks like they've taken it in their stride not that anyone should care in the slightest.

And we're still up 20% on a 90 days time frame while the price is down 25%
I can hardly find a worse indicator other than the number of horses that have taken a dump on the track at Kempton.

In order to provide some historic context to this Hash Ribbons indicator, as well as to highlight this isn't just relevant to 2018, here is a zoomed out view of it's relevance from 2015 to present. Call it repeated coincidence, or alternatively a consistent and relevant pattern that has formed.



Additionally, below is the Weekly view to confirm it's relevance in accurately anticipating price movements. As you can tell, it has been backtested in order to be as useful as possible in determining price movements based on decreasing difficulty levels and their relevant MAs.



I do find your analysis of s17 and s20 releases very relevant, but instead believe it contextualizes how and why mining capitulation occurs, as oppose to disproves it.

[dragonvslinux]

Currently back to capitulating regarding miner hash rate, for anyone who cares or understands how this indicator functions:

[exstasie]

How do you distinguish between a dip and a crash here?

Last week's difficulty drop was only -0.74%. Prior to that, difficulty actually rose by +1.99%. That doesn't seem indicative of "capitulation" to me. We need an actual crash like Q4 last year for miners to start shutting down en masse.

[dragonvslinux]

How do you distinguish between a dip and a crash here?

Last week's difficulty drop was only -0.74%. Prior to that, difficulty actually rose by +1.99%. That doesn't seem indicative of "capitulation" to me. We need an actual crash like Q4 last year for miners to start shutting down en masse.

I think you may be confusing the start of the capitulation with the end of the capitulation cycle. Minder shut off en masse usually at the end of the such a cycle.

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)

Hope that helps things for you sufficiently. Consequently this indicator measure mining difficulty decreasing, but is still based on hash rate nonetheless.
Bare in mind this is only one indicator, that I wouldn't rely on to trade on exclusively. But it appears to be a well back-tested indicator none the less.

[exstasie]

How do you distinguish between a dip and a crash here?

Last week's difficulty drop was only -0.74%. Prior to that, difficulty actually rose by +1.99%. That doesn't seem indicative of "capitulation" to me. We need an actual crash like Q4 last year for miners to start shutting down en masse.

I think you may be confusing the start of the capitulation with the end of the capitulation cycle. Minder shut off en masse usually at the end of the such a cycle.

You're removing all meaning from the word "capitulation" and making it interchangeable with "bear market." There is no such thing as a capitulation cycle. It refers to a specific part of a bearish market cycle, where massive losses on high volumes are observed.

Miners capitulating at the end of a bear market is exactly what would be expected:

After capitulation selling, many traders think there are bargain buying opportunities. The belief is that everyone who wants to sell a stock for any reason, including forced selling due to margin calls, has already sold. The price should then, theoretically, reverse or bounce off the lows. In other words, some investors believe that capitulation is the sign of a bottom.

While traders often attempt to anticipate capitulation selling or buying, the reality is that capitulations are after-the-fact outcomes that result from the maximum psychological and financial pain that can be endured by investors before liquidating their positions.

However, a 0.74% drop in difficulty does not indicate capitulation. Maybe it indicates something but I would find a different name for it.

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)

That's like calling a bearish cross a "capitulation." A bearish cross will always precede capitulation, but capitulation does not always follow from a bearish cross.

Hash rate follows price (though it doesn't correlate perfectly) so watching miners instead of price just seems to further blur the issue.

[dragonvslinux]

How do you distinguish between a dip and a crash here?

Last week's difficulty drop was only -0.74%. Prior to that, difficulty actually rose by +1.99%. That doesn't seem indicative of "capitulation" to me. We need an actual crash like Q4 last year for miners to start shutting down en masse.

I think you may be confusing the start of the capitulation with the end of the capitulation cycle. Minder shut off en masse usually at the end of the such a cycle.

You're removing all meaning from the word "capitulation" and making it interchangeable with "bear market." There is no such thing as a capitulation cycle. It refers to a specific part of a bearish market cycle, where massive losses on high volumes are observed.

There is nothing interchangeable about miner capitulation and bear markets, there is only a relative correlation between the two. For example as previously referenced, there was miner capitulation in 2012 and 2013 that arrived during price consolidation periods, without any bearish price movements.  Fundamentally, the hash ribbons indicator is based on hash rate, not price that relates to bear markets. Acknowledging certain relationships between the two - miner capitulation and bear markets - might be a good start in order to understand this technical analysis.

[dragonvslinux]

Capitulation is over? I am not 100% sure on the conditions for the buy signal (blue dot), but the sold green dot indicating the bullish MA crossover is very close to this. Will update when it occurs. Here would be the equivalent "point in hash rate" to January 2019 price buy signal (blue dot) based on the Hash Ribbons indicator:

[dragonvslinux]

Literally flashing green in front of my eyes  the Weekly is also bull-crossing:

[Naficopa]

I am not an expert on reading charts, but on the chart in the opening post it looks like the market collapse is yet to come. I think the risk is still in the air and rising up hashrate does not calm me down at all. I think I won't be calm until about mid-February.

[dragonvslinux]

I am not an expert on reading charts, but on the chart in the opening post it looks like the market collapse is yet to come. I think the risk is still in the air and rising up hashrate does not calm me down at all. I think I won't be calm until about mid-February.

To be fair, for now, the miner capitulation appears to of been averted, instead it seems there was only minor capitulation
FYI, 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.

I tested this by using the indicator on a Gold chart (on the Daily and Weekly as an experiment), that has had a recent upwards move in price, which signaled a buy on both charts. Hence if Bitcoin's price were to break upwards, it's confirmed that there would be a buy signal (as long as hash rate holds up as well). Obviously this could come from lower lows, but it's worth paying attention to imo, as this would be the first buy signal since $3,635 on January 11th 2019.

Hence, OP updated from bearish scenario to bullish setup.

[dragonvslinux]

Hash Ribbons confirmed it's 10th buy signal in 9 years yesterday on the Daily chart, make of it what you will:



Here's the zoomed out / back-tested look of 2015-2019 buy signals from this indicator:



The 3 Day chart is also signalling a buy, confirmation would arrive tomorrow with the close of the current candle:



The Weekly chart however, that has been signalling "hash recovery" has been unable to maintain this MA bull-cross:



And for reference sake, the Monthly chart is still signalling capitulation (but is much less reliable indicator on this time-frame it seems):



Longer-term time-frames are yet to confirm this hash recovery, as well as price follow through, but already seeing buy signals on lower times-frames.

[dragonvslinux]

5 Day Chart:

Just noticed this is also the first buy since 2016 approx $575 BTC, given there was no buy signal earlier this year:



This is therefore the 8th buy signal in 9 years on this time-frame, average of 1 signal every 13.5 months.

There is notable confluence with the TD Sequential as the 5 Day chart also printing a TD 9 Buy signal:



Last time we had a TD 9 Buy on the 5 chart was in January 2019 at $3,222 during miner capitulation

[davinchi]

I really adore people who look at charts all day and try to figure out when bitcoin will go up or will go down. Haven't you already learnt your lesson from the past 10 years when bitcoin has always been under control of whales? I mean honestly charts could say that bitcoin has to go above 20 thousand dollars tomorrow and you can see bitcoin at 2000 dollars or maybe charts could say price will go down a lot but it reaches a new all time high.

Why would that happen? Simply because there are people with BILLIONS of dollars in bitcoin and those are the people who are in control of the price, when you leave an unregulated market to folks who first created it, they will do whatever they can to run it because they know there is no law that says they can't manipulate in bitcoin.

[exstasie]

I really adore people who look at charts all day and try to figure out when bitcoin will go up or will go down. Haven't you already learnt your lesson from the past 10 years when bitcoin has always been under control of whales?

Whales don't control the market. The stupid ones who fight the market, and try to "force" it up or down, don't stay whales for long.

Case in point: the Bitstamp bear whale. BTC was trading in the mid-$300s at the time, then this guy single handedly dumped Bitstamp down to $300. Then he placed a 30,000 BTC sell wall there.

The market ate through his wall then rallied 50% to the mid-$400s. He lost his "whale" status after that.

[yefi]

Why would that happen? Simply because there are people with BILLIONS of dollars in bitcoin and those are the people who are in control of the price, when you leave an unregulated market to folks who first created it, they will do whatever they can to run it because they know there is no law that says they can't manipulate in bitcoin.

If we were to give you billions of dollars in bitcoin and told you to manipulate price, what are the chances you'd screw up and end with nothing? Pretty high I'd say. Nobody has manipulated the ledger for over nine years, so your only options are to try outsmarting the market by trading and/or faking numbers on exchanges. As Mark found out with Willy, this quickly leads to an untenable position.

[dragonvslinux]

I really adore people who look at charts all day and try to figure out when bitcoin will go up or will go down. Haven't you already learnt your lesson from the past 10 years when bitcoin has always been under control of whales? I mean honestly charts could say that bitcoin has to go above 20 thousand dollars tomorrow and you can see bitcoin at 2000 dollars or maybe charts could say price will go down a lot but it reaches a new all time high.

Why would that happen? Simply because there are people with BILLIONS of dollars in bitcoin and those are the people who are in control of the price, when you leave an unregulated market to folks who first created it, they will do whatever they can to run it because they know there is no law that says they can't manipulate in bitcoin.

As  exstasie said, I don't find this to be particularly true, but assuming it is... When do you think these people with BILLION OF DOLLARS will pump or dump the price of Bitcoin? Do you think they do this randomly at bad times, or more likely to do it knowing they can manipulate the technical picture of the charts? There are enough examples of this, bouncing back from oversold RSI, closing above or below the 200 Day MA in a single day, a lot of these days bot driven to remove the human emotions from the trades.

My point is, if whales are going to make big moves, I assure you it's based on probabilities rather than a "hunch" they can move the price higher or lower. Otherwise they won't remain a whale of market long that's for sure. Of course many whales do get it wrong, never to be whales again, but the whales play into the technical as much (if not more) than the average trader. Most relevantly, anyone can get it wrong, probability only gives you so much of a chance to get things right.

I'm glad you adore people like me, I did enjoy successfully predicting many aspects of the breakdown from $10k down to current prices. What you're mainly forgetting is there can be a 99% chance that we go up, and the market can still go down 1 out of 100 times. This is the entire basis of basic mathematics that it seems so many overlook. Not to mention all technical analysis is subjective, as it should be.

[dragonvslinux]

And now you have the Weekly confirming the 7th buy signal in 9 years as well:

Weekly chart - has been flirting with recovery stage of miner capitulation, similar to August 2016:

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.

Notably on certain exchanges (such as Bitstamp), the indicator is again signalling a buy on this weeks current opening candle:



If the candle closes with the buy signal, this would be the first time two consecutive weeks have received buy signals

If these buy signals come through, I will become an uber bull  

And there you have it.

[dragonvslinux]

Just found the medium thread about this indicator (after sometime I know  ), so have added in the Risk/Reward Returns table (based on Daily buy signals):

For reference sake, with the December 2019 buy signal at $7,245, that suggests a dip between 3-15%, this would calculate the next swing low around $7025-$6,160, with around $6,600 as an average. While $6,400-$6,500 might not be the bottom, this reliable indicator is none the less suggesting we are very unlikely to break below $6K.
If I find the time, I will try and make a table & chart that represents the min-max & average time after the buy signal that the low arrives, as I realise in 2015 this was nearly a year...