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Best long-term Bitcoin buy signal flashes, hedge fund CEO warns — TradingView News
In his latest message, Charles Edwards, CEO of Bitcoin and digital asset hedge fund Capriole, pointed out a significant market indicator in the latest edition of the company’s newsletter, Update No. 51. Edwards highlights the triggering of the “Hash Ribbons” buy signal, a notable event that has historically indicated excellent buying opportunities for Bitcoin.
Bitcoin hash tapes flash buy signal
The Hash Ribbons indicator, first introduced in 2019, uses mining data to predict long-term buying opportunities based on economic pressures from miners. The signal arises from the convergence of the short-term and long-term moving averages of Bitcoin’s hash rate, particularly when the 30-day moving average falls below the 60-day average. According to Edwards, this event is “in the vast majority of cases synchronized with broader Bitcoin market weakness, price volatility and significantly longer-term value opportunities.”
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The current capitulation of miners, as highlighted by Edwards, began two weeks ago and coincides with post-halving adjustments in the mining sector. This period often leads to business closures and even bankruptcy of the least efficient miners. Edwards notes: “Just as we are seeing today, these mining facilities will typically be phased out over several weeks after the Halving, resulting in hash rates declining.”
Despite the historical profitability of miners, particularly with rising block fees resulting from new applications such as Ordinals and Runes, Edwards suggests that the market should not overlook the current opportunity signaled by the latest Miner Capitulation. “Even though this capitulation comes when miners have been largely profitable, we would be remiss not to notice this rare opportunity,” Edwards said.
Hash Ribbons have not been free from criticism, with each event sparking debate over the current relevance and accuracy of the signal. Edwards addressed these criticisms by referencing the previous year’s signal, which correlated with Bitcoin trading in the $20,000 range, reinforcing the indicator’s predictive power. “Every event brings with it a debate about its relevance today or why the current signal perhaps doesn’t matter,” Edwards explained.
Edwards advises that the safest approach to exploiting Hash Ribbons is to wait for confirmation through renewed hash rate growth and a positive price trend. He concludes: “The safest option (lowest volatility opportunity) to invest in the Hash Ribbons strategy is the confirmation of the purchase of the Hash Ribbon, which is triggered by a renewed growth of the Hash Rate (30DMA>60DMA) and by a positive price trend (as defined by the 10DMA >20DMA price).”
Broader market context
Moving from the technical to the contextual, Edwards discusses the changing regulatory landscape that has recently become more favorable to cryptocurrencies. The SEC’s approval of an Ethereum ETF, which classifies ETH as a commodity, marks a significant shift in the regulatory approach towards cryptocurrencies and reflects growing institutional acceptance.
“The reclassification of Ethereum and the approval of its ETF represents a fundamental shift in the government’s stance on cryptocurrencies,” notes Edwards. “This could lead to greater institutional involvement and potentially greater stability in cryptocurrency markets.”
Furthermore, Edwards highlights macroeconomic factors that could influence the value of Bitcoin. The expansion of the M2 money supply and the Federal Reserve’s stance on interest rates are designed to stimulate economic activity. However, Edwards warns of potential long-term consequences of these policies, such as inflation, which could increase Bitcoin’s attractiveness as a hedge against monetary devaluation.
“Bitcoin was conceived as an alternative to traditional financial systems in times of economic stress,” notes Edwards. “Current economic policies reinforce the fundamental reasons for Bitcoin’s existence and could lead to greater adoption.”
On the technical front, Edwards provides analysis of Bitcoin’s price movements, highlighting the recent breakout and consolidation above critical resistance levels. He sets a conditional medium-term price target of $100,000, provided the market maintains its current momentum and the monthly close remains above the critical threshold of $58,000.
At the time of writing, BTC was trading at $69,008.
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