Cold weather conditions in the US are negatively impacting Bitcoin (BTC) miners, but could be a positive signal for the Bitcoin price.
Some miners affected by adverse weather conditions were forced to shut down their mining machines. This resulted in a decrease in hash rate.
Following this drop in hash rate, attention has turned to the Hash Ribbon indicator. According to this, the “hash ribbon” indicator, which measures the ratio of the 30- and 60-day averages in the hash rate, is also giving a signal of capitulation.
If the 30-day average of the hash rate falls below the 60-day average, the hash ribbon indicator also enters a critical zone.
Conversely, the worst period is considered to be over when the 30-day average rises above the 60-day average.
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.
At this point, analysts note that this signal, which historically coincides with major Bitcoin price lows, was also observed after the FTX crash in 2022 and the yen carry trade unraveling in 2024.
A similar situation occurred in August 2024, when Japan’s surprise interest rate hike caused Bitcoin to fall below $49,000. At that time, the hash ribbon indicator also entered a downward trend, with the 30-day average falling below the 60-day average. However, the 30-day average later rose above the 60-day average, initiating a recovery for Bitcoin, and the BTC price reached $100,000 just a few months later.
Similarly, during the FTX cryptocurrency exchange crash in 2022, the Bitcoin price dropped to around $15,000 as miners surrendered. The Hash Ribbon indicator also declined, but after the Hash Ribbon returned to normal, the BTC price rose to approximately $22,000.
At this point, it can be concluded that for the Hash Ribbon indicator to have a positive impact on the Bitcoin price, it needs to recover upwards and the 30-day moving average needs to rise above the 60-day moving average; however, there is no guarantee that this pattern will not be repeated.
The key question here remains whether this pattern will repeat itself and whether Bitcoin will enter another bull run as the hash rate and Hash Ribbon begin to normalize. There is no guarantee that the BTC price will not fall further from its current levels.
*This is not investment advice.
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