Analyst Unveils Native Backside Indicators as Miners Experience Capitulation Phase

Bitcoin is signaling native bottom indicators as miners transition into a new “capitulation” phase, according to on-chain data.

In a post on X dated February 10, the analytics account Bitcoindata21 indicated that this trend could suggest a forthcoming price recovery.

The analyst highlighted a “triggering” event in Bitcoin’s hash ribbon indicator, a well-known tool for forecasting BTC price reversals at local lows.

What is the Hash Ribbon Indicator?

The hash ribbon monitors miner activity by comparing the 30-day moving average (MA) of hashrate to the 60-day MA.

When the 30-day MA dips below the 60-day MA, it signals miner capitulation, indicating that mining has become too expensive in relation to operational costs.

Historically, such occurrences are infrequent but typically precede significant BTC price increases.

Bitcoindata21 noted that the capitulation phase concludes when the 30-day MA crosses back above the 60-day MA, reflecting renewed confidence among miners.

The last miner capitulation took place in mid-October 2024, just before BTC/USD surged past $73,800, ultimately reaching $108,000 two months later.

Hash Ribbon indicator is triggering
“The Hash Ribbon is a market indicator that assumes that Bitcoin tends to reach a bottom when miners capitulate, i.e., when Bitcoin becomes too costly to mine relative to the cost of mining. The Hash Ribbon indicates that the worst of the… pic.twitter.com/ymVMfHEiKc

— bitcoindata21 (@bitcoindata21) February 10, 2025

Analysts believe a similar price pattern could develop in the upcoming months.

Darkfost, a contributor to the on-chain analytics platform CryptoQuant, characterized the hash ribbon as a “reliable signal” for market entries.

“This indicator has consistently pointed out optimal entry zones for both mid-term positioning and long-term accumulation,” he stated in a blog post on February 11.

He added that, aside from the COVID-19 market shock, every hash ribbon signal in history has preceded a Bitcoin rally.

Despite the early indicators, Charles Edwards, founder of Capriole Investments, warned that miner capitulation has only just commenced.

“Bitcoin miners are once again increasing their stack,” Edwards informed his X followers, referencing Capriole data on miner netflows.

Bitcoin miners are once again increasing their stack pic.twitter.com/5V3bhjdFwe

— Charles Edwards (@caprioleio) February 6, 2025

While the current signals suggest a potential reversal, Edwards cautioned that the actual market turning point has yet to arrive.

“We all know what it means when a Hash Ribbon buy signal eventually follows,” he remarked. “A lot can happen in between. However, we’re entering a window of opportunity.”

Ethereum Short Positions Reach Record High as Hedge Funds Bet Against ETH

Ethereum is witnessing an unprecedented level of short selling, with futures contracts on the Chicago Mercantile Exchange (CME) hitting a record high of 11,341, according to ZeroHedge.

The increase in bearish positions, up over 40% in just one week and 500% since last November, indicates growing pessimism regarding Ethereum’s short-term prospects.

As reported, the volume of Ether withdrawn from crypto derivatives exchanges has surged to its highest level since August 2023, a trend analysts view as a bullish indicator for ETH’s price.

On February 6, Ether’s net outflows from derivatives exchanges reached 300,000 ETH, valued at approximately $817.2 million, with ETH trading at $2,724 at that time.

This movement suggests diminished selling pressure as traders close leveraged positions and transfer assets to cold storage.

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