On-chain mining indicators for <a href="https://www.cryptoknowmics.com/news/crypto-market-capitalization-exceeds-3-trillion-as-ether-and-bitcoin-increase/">Bitcoin</a> (BTC) such as hash ribbon and the Difficulty Ribbon Compression suggests that the flagship cryptocurrency is in the initial stage for a large-scale breakout.
<h2 id="h-bitcoin-difficulty-ribbon-compression">Difficulty Ribbon Compression Indicates Bullish Price Action</h2>
The Difficulty Ribbon Compression uses moving averages (MA) of bitcoin mining difficulty wherein historically values between 0.01 and 0.05 have indicated bottoms for the digital asset. During Bitcoin’s massive rally last year, the indicators mostly stayed in the upper portion of this range.

In fact, there have been three cases historically where the difficulty ribbon compression fell to the upper portion of a range after massive price breakouts.

The first occurred during 2012-2013 where the return to the upper portion of the range signaled downfall prior to a new upward move. The second time was during 2015-2016 where the indicator values moved to the upper portion of the range before a rebound.

The third time occurred in 2019-2020 where BTC continued to decrease after the return to the range following which an upward movement eventually began.

Naturally, this only suggests that the flagship cryptocurrency is in the midst of a massive price rally with the current <a href="https://studio.glassnode.com/metrics?a=BTC&amp;category=&amp;m=indicators.DifficultyRibbonCompression" target="_blank" rel="nofollow noopener">indicator</a> giving a reading of 0.06, close to the upper portion of this range.
<h2><strong>Hash Ribbon Signals Start of a Bitcoin Rally</strong></h2>
Another on-chain indicates hash ribbon, calculates the hash rate to determine if miners are capitulating, also known as the period in which mining costs are higher than rewards. The indicators also use a 30- and 60-day MA in order to determine when these periods of capitulation come to an end.

During Bitcoin’s bearish phase from May 17 to June 3, the indicator was dark red. Historically, indicators switching from light to dark red have provided great buying opportunities which were seen in June 2021 when the digital asset went on a downward hill.

Currently, a bearish cross between the two MAs is represented in the <a href="https://studio.glassnode.com/metrics?a=BTC&amp;category=&amp;m=indicators.HashRibbon" target="_blank" rel="nofollow noopener">chart</a> by a shift to a light red area. Once the difficulty adjusts, a return to profitability will be seen by a shift to a dark red area, and eventually white. Historically, this only suggests that BTC is in the initial phases of a significant upward move.

Mining Indicators Suggest Bitcoin’s Price is Ready to Explode

On-chain mining indicators for Bitcoin (BTC) suggests that the leading cryptocurrency is in the initial stage for a large-scale breakout.

Jafrin is a cryptocurrency journalist/researcher fascinated by the world of decentralization. She is hopeful towards blockchain’s innovation and its potential to reshape the world for good. Currently, she is bringing out the best of cryptosphere via covering the latest ins and outs of the blockchain space.

Mining Indicators Suggest Bitcoin’s Price is Ready to Explode

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