Indicator that heralds 2020 Bitcoin bull run signals buy-back
Finally, in July, when the price of Bitcoin was close to 10 thousand dollars, another buy signal occurred yesterday in an indicator that signaled “buy”.
The last time it signaled a buy, the price of Bitcoin went from just under 10 thousand dollars to the level we recently touched almost 20 thousand dollars, and yesterday the “buy” signal occurred again.
The indicator in question is called a” Hash Ribbon ” and is used to determine ideal purchase times. The basis of the indicator is based on the relationship between hash rate and price.
Charles Edwards, developer of the indicator, said: “when the 30-day moving average of Hash rate exceeds its 60-day moving average, the worst of the ‘miner capitulation’ is behind and recovery begins. Purchases at these points give incredible results.”he says.
Rafael Schultze-Kraft, Chief Technology Officer at cryptocurrency data company Glassnode, shared the following chart yesterday and said he did not give an investment advice: “I am very curious about what will happen in the coming weeks/months.”
As the chart above shows, the price of Bitcoin moved upward after the resulting purchase signals. The size of these movements was sometimes very large, and sometimes limited.
How do miners affect the price?
As new BTCs are produced, miners sell some of the BTCS they produce to cover production costs. This creates pressure for a drop in price. Miners doing business at high cost are selling more BTC to keep their operations going. They capitulate when it becomes unsustainable. After that, hash power and Bitcoin production difficulties are reduced, leaving only miners who are strong. They are selling less and thus leaving more room for upward price movement.