Hash ribbons show miners out of capitulation phase
One group of Bitcoin network participants for which an end to hard times seems demonstrably near is miners.
Despite the latest price drop, on-chain data now shows that Bitcoin miners en masse have exited a “capitulation” period lasting over two months.
According to the hash ribbons metric, which uses two moving averages of hash rate to determine miner participation trends, a rebound is now taking shape.
The move has been long anticipated. Earlier in August, mining firm Blockware forecast the hash ribbons capitulation phase to end either this month or next.
The latest shift was noted by Charles Edwards, CEO of asset manager Capriole, who compared this year’s capitulation with others in Bitcoin’s history.
“The Bitcoin miner capitulation has officially ended today, making it the 3rd longest capitulation in history at 71 days,” he wrote in a Twitter thread:
“This capitulation zone was longer than 2021, and just two days shorter than 2018’s where price touched $3.1K.”
A look at hash rate estimates from monitoring resource MiningPoolStats shows that an uptick above 200 exahashes per second (EH/s) likely began in recent days.
“Historically, Bitcoin’s miner capitulations have captured major price lows and been great buy-signals,” Edwards continued, echoing the classic Bitcoin market mantra, “price follows hash rate:”
“Miner capitulations that occur late cycle (at least 2 years after halving) and after cycle tops have been the most profitable long-term signals (eg. 2012, 2015, 2018).”