Hash ribbons is on the brink of inversion. That’s news you never want to hear. Inversion signals a downturn in hashrate. It’s a leading indicator of miner capitulation. Bitcoin (BTC) is dangling on the edge of a cliff.
Small miners get backed into a corner when BTC price is low & the generation of mining hardware they use becomes obsolete. Inversion’s likeliest outcome: cash-desperate miners sell BTC gradually…then all at once.
It’s a vicious cycle: Undercapitalized miners panic sell, price dumps, longs get squeezed, stop losses cascade — then more miners lose their lunch.
But inversion hasn’t happened yet — if we’re lucky, hashrate recovers before capitulation starts to snowball. It’s not looking good though — we’ve *never* been so close to inversion for so long without going over the edge.
There’s a much larger context to this. I spelled it all out a month ago — highly recommended reading.
Miner capitulation can be anticipated with hash ribbons, which tracks the 30 & 60 day SMA of hashrate. It’s a strong indicator of trend, and the trend is almost always up. A hash ribbons inversion (MA crossover) confirms that the trend is down.
Inversion is super rare — it’s only happened twice in the last four years. The first time was a few weeks after the halvening, in 2016. The inversion kicked off an immediate 30% drop.
The second inversion was just over a year ago — two weeks before price broke the $6k bear market bottom.
There are a few implications:
If your friends or family have expressed interest in buying BTC— they need to know there’s not much time left.
Second: if bitcoin capitulates, the shitcoin index shits the bed. 95% of alts will dump.
There’s nothing to do yet. But if we get inversion — I’d consider starting to take profit on alts.
Third: After the drop has bottomed, I expect a long triangular consolidation process to follow, leading into the halvening.
Post-halvening is the *gravitational* short. Imagine your revenue cut in half — overnight, forever. I don’t care how long ago you priced it in — naked swimmers are gonna meet the tide. Inversion has followed both halvenings, 2-3 weeks after the event, like clockwork.
And after that, what happens next? More consolidation — then full blown bull market!
To learn more about hash ribbons & miner capitulation, read this solid piece by Charles Edwards, the creator of hash ribbons.
*Follow the author of this article, Cole Garner, on twitter.