What Is The Hash Ribbons Indicator?

The main thing

  • Hash Ribbons is an indicator designed to determine the global price bottom of bitcoin.
  • The metric evaluates market sentiment and the possibility of miners capitulating due to a fall in the price of the first cryptocurrency or an increase in mining operating costs. 
  • Hash Ribbons is based on the assumption that miners are the most resilient and sensitive to market recovery participants in the industry.

Who developed the Hash Ribbons indicator?

Hash Ribbons was developed by Charles Edwards, founder of Capriole Investments, in 2019. The creation of the metric was preceded by his early work on determining the price bottom of bitcoin based on network hash rate data (Hash Rate Capitulation).

Edwards took advantage of the insights of analyst Willy Wu, who proposed the Difficulty Ribbon Compression indicator based on the Difficulty Ribbon. He combined both approaches under one concept. 

What is miner capitulation?

In the context of the Hash Ribbons indicator, the capitulation of miners means the moment when equipment maintenance and electricity costs exceed the price of the mined cryptocurrency for 1-2 months.

Based on the bitcoin hash rate, Hash Ribbons signal the supposed capitulation of miners. In other words, the indicator indicates the disconnection of a significant part of the equipment from the network. 

The rationale for the Hash Ribbons indicator

Edwards suggested that the price of bitcoin and the cost of mining are inextricably linked to the hash rate. The lower the price and the higher the costs, the fewer miners remain in the network. And vice versa – the higher the price and lower the costs, the more interest is observed on the part of the participants in the process.

Since Hash Ribbon is based on average bitcoin hash rate data, the indicator is suitable for analyzing long-term trends and finding market entry points.

The delayed nature of the formation of the metric does not allow it to be effectively used to determine the good moments for the sale of bitcoin.

How to use Hash Ribbons?

The Hash Ribbon chart is based on two simple moving averages (SMA) for a daily bitcoin hashrate with periods of 30 and 60 days. When the 30-SMA crosses the 60-SMA from top to bottom, it indicates the start of miners’ capitulation. An upward crossover is a buy signal.

According to Edwards, in 2015, the Hash Ribbon indicator showed a “bad” entry point – the price of bitcoins fell by 42%. A similar scenario was repeated in 2019, 2021, and 2022.

According to Edwards, such “failed trades” can be avoided by adding simple moving averages (50-SMA, 200-SMA) for the price of bitcoin. Simultaneous use of two tools will help reduce risks.

Data: Trading View.

Risks of using the indicator

The popularity and historically positive return on investment based on Hash Ribbon do not guarantee that the signals will work out in the future. Let’s consider several risks associated with the use of the indicator.


Hashrate is the only unit of account for the formation of the metric. Unlike mining difficulty, the value of network computing power is an approximate and highly volatile indicator. Inaccurate data can lead to incorrect conclusions.

Market volatility

According to Edwards statistics, since the formation of a signal to buy, the price of bitcoin can lose from 3% to 42%. This value may be higher in the future, so the risk of volatility should be considered.


The legislative ban on mining in China showed that the regulation of the industry is reflected in the hashrate of the bitcoin network. Local or global government restrictions may affect the activities of industry participants in a given country. This will reduce the hashrate of the network, distorting the logic embedded in the Hash Ribbon.

Technological risks

The start of sales of more efficient mining equipment, an increase in the performance of the old one, and the emergence of new cheap energy sources are risks for analyzing the distribution of hashrate in the world. 

New technologies can crowd out old ones without reducing the overall processing power of the network. Inefficient players will leave the market, and the cost of bitcoin mining will fall. Thus, the capitulation of the miners may occur, but the Hash Ribbon indicator will not notice this. 

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