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Hash ribbons

An indicator comparing a 30-day and 60-day moving average of hash rate, used to flag miner capitulation and its end.

When the 30-day average falls below the 60-day, hash rate is declining and the indicator is said to signal capitulation. The crossover back above is treated as recovery, and some versions add a price-momentum confirmation before flagging a buy.

It is a moving-average crossover on a noisy series, with all the usual properties: it lags, it whipsaws, and its historical record rests on very few completed cycles. Hash rate is also estimated from block intervals rather than measured, so short-window readings are statistically shaky.

Its main honest use is descriptive: it marks periods when mining economics were under stress, which is genuinely informative about the industry. Treating the crossover as a trade signal is fitting a rule to a handful of past instances, and this is not a recommendation to do so.

Related: miner-capitulation, hash-rate, mining-difficulty, moving-average

See it drawn

Original diagrams for the ideas on this page. Illustrative, not real market data.

A fast and a slow moving average crossingA jagged price line with two smoother average lines through it; the fast average dips below the slow one on the left and cuts back above it in the middle, where a circle marks the crossing.pricefast averageslow averagefast crosses belowfast crosses abovethe slow averageAverages of recent closes; the fast one reacts sooner than the slow one.
Fast and slow moving averages crossing. A moving average is the average of the last few closing prices, redrawn each period. An average over fewer periods turns sooner than one over many, so the two lines cross whenever the recent pace of the market changes.
The mood around a market cycleA price path rising to a peak and falling to a trough, labelled with the feelings usually attached to each stage of the round trip.PRICETIMEOPTIMISMEXCITEMENTEUPHORIAANXIETYDENIALPANICCAPITULATIONDESPONDENCYHOPEOPTIMISM RETURNSMAXIMUM FINANCIAL RISKMAXIMUM FINANCIAL OPPORTUNITY
The mood around a market cycle. The same price path labelled with the feelings that tend to travel with it, from optimism up to euphoria and down through panic to despondency. Confidence is highest where the most money is already committed and prices are highest.

Educational only, not advice. Spotted an error? Post in Site Feedback.