The Hash Ribbon Is Appearing Once Again
The last time a “Hash Ribbon” appeared was in late April. At that time, the world’s number one cryptocurrency by market cap was trading for around $7,500, more than $3,000 higher than where it had stood during the coronavirus peak in mid-March. From there, bitcoin ultimately rose to as high $10,400, suggesting the currency had regained all it had lost in just over two months.
In an interview, Edwards explained:
Bitcoin Hash Ribbons ‘buy’ signal just confirmed. The post-halving signal is particularly special. It will probably be a rather long time until the next one occurs… and so, the great bull run begins.
Continuing, Edwards said that the Hash Ribbon will often be seen on BTC technical charts about once a year. It often shows itself whenever miners begin to sell their bitcoin stashes once the currency becomes too expensive to extract. This makes perfect sense considering the third bitcoin halving just took place about two months ago.
This was a rocky situation in that while everyone was previously expressing excitement that the currency would reach new highs because of the halving, the event took place at the same time the coronavirus was ravaging global markets. The currency’s price fell by roughly 70 percent, meaning that by the time the halving occurred, the asset’s new high was around where it had been previously trading in February. Nothing worth breaking out the champagne for.
On top of that, the event itself proved to be something of a dud, with more price spikes being recorded during the initial lead up. Either way, the halving offered a series of shaky circumstances for cryptocurrency miners that probably made them think twice about keeping their operations up and holding onto their shrinking bitcoin stashes.
No doubt, several of them made the decision to sell off at least part of what they owned to get some long-awaited cash in hand to survive the crumbling economy. It was this behavior that likely led to the showing of another Hash Ribbon.
Miners Have Sold Much of What They Owned
Edwards explains in his October 2019 thesis:
Because of the effect of negative sentiment and price action during deep bear markets and times of miner capitulation, the best time to buy bitcoin is typically somewhere in the middle of the ‘miner capitulation’ period.
Interestingly, these words also make sense in that following the spread of the virus, many people likely purchased bitcoin and additional digital assets as a means of hedging their wealth and protecting themselves against the threat of inflation and other economic problems that many analysts said would arise due to the printing of money for American stimulus checks.