I wouldn't trust the Hash Ribbons indicator from LookIntoBitcoin. I'm not sure where they are getting their hash rate data from, but it's very different than the original indicator on trading view:
As you can see, LIB indicator shows a bullish crossover with the MA30 and MA60, indicating hash rate recovery. While the original indicator shows nothing of the sort. I've otherwise been documenting the ongoing "
miner capitulation" for anyone interested. Currently the
average mining cost is back below current price, so hash rate remains relatively stable.
The capitulation signal is therefore based on lack of growth, rather than hash rate decline. The buy signal would otherwise arrive with a MA bullish crossover, as well as price returning to $30K. The fact that miners have been heavily dumping their coins I otherwise find a good thing, to me it means they don't have a backlog of coins to sell for further capitulation right now.
Since you seem like an expert about BTC miners here, do you think the recent amount of heavy dump from miners has anything to do with the Ukraine-Russia war? Cause from what information I know, a lot of BTC mining farms were in Ukraine because of the cheap price of electricity. Then bam, the war forced those miners hastily sell their bags to bail out because of the disruption in business, have pay back loans.
I also agree with your assessment, less amount of BTC in miners' bags is a good thing.
Well for starters, I'm no expert. I've simply studied the original
hash ribbons indicator since 2019. I otherwise don't think this has anything directly to do with the Ukraine-Russia war no.
There might be a lot of mining farms in Ukraine, but in comparison to the rest of the network, I imagine it's negligible. Miners, along with whales, have a habbit of dumping big bags near the lows (I saw a graph recently confirming this, but unfortunately can't find it for reference sake). It is probably to do with loans and bad business models though, as I've seen mentioned elsewhere. Whereas miners who can't turn a profit should simply be switching off and waiting for price to recover, if they have outstanding loans (which they dependant on mining to pay), then no doubt they will have to dump their bags (even at a loss). That's my assumption anyway, giving how over-leveraged and over-collateralized the market has been in recent months.
Again nope, SMA30, SMA60, SMA69, DAP69, none of them don't show anything meaningful about mining.
The SMA30 and SMA60 on the 3rd chart in the OP are the moving averages for hashrate, not for price. His argument seems to be that since the 30 day hashrate moving average has dropped below the 60 day hashrate moving average, that the hashrate is falling.
To clarify, this MA crossover doesn't imply hash rate is falling, but simply that the average hash rate over the past 2 months is higher than the average of the past month. The MA30 has been falling for over a month now, even with hash rate making a new ATH during this period. As I've referenced
elsewhere, this "capitulation" signal can appear from stagnation of growth, such as what happened three times in 2020.
Which is partly true as hashrate is down marginally over the last few weeks, but we are talking in the region of a few percent as you point out, and certainly not a crash as he is suggesting.
Agree. The fact that price fell below the average mining cost @ $30K in mid-May, but now has reduced to $20K (while price is above it), means that so far the network is balancing itself against price quite nicely. The capitulation event occurs when price drops below average mining cost and fails to recover, either with the average coming back down to the price, or the price coming back to the average.
