The Hash Ribbon indicator, a technical metric that has historically signaled major Bitcoin price bottoms, is once again flashing a potential capitulation signal for miners. This development comes as severe cold weather conditions across the United States have forced some Bitcoin miners to shut down operations, leading to a notable drop in the network's hash rate.
The indicator measures the relationship between the 30-day and 60-day moving averages of Bitcoin's hash rate. A bearish signal, indicating miner capitulation, occurs when the 30-day moving average falls below the 60-day moving average. Analysts highlight that this precise signal preceded significant Bitcoin price recoveries following past crises, including the FTX exchange collapse in 2022 and the market turmoil triggered by Japan's surprise interest rate hike in 2024.
"Historically, on the Hash Ribbon indicator, the 30-day moving average crossing above the 60-day moving average coincides with recoveries in the BTC price," the report notes. Following the FTX crash, Bitcoin bottomed near $15,000 before recovering to approximately $22,000 after the indicator normalized. Similarly, after the Japan-induced crash to below $49,000 in August 2024, the subsequent recovery in the Hash Ribbon preceded a powerful bull run that saw Bitcoin's price surge to $100,000 within months.
The current weather-related hash rate decline has pushed the indicator into this critical zone. For a bullish reversal signal to be confirmed, the 30-day moving average must cross back above the 60-day average. While this pattern has been a reliable historical precursor to price rallies, analysts caution that there is no guarantee it will repeat, and Bitcoin's price could still decline from current levels.
