Hash Ribbon Inversions are an indicator that tracks boom and bust cycles in the mining market.
In the cryptocurrency industry, the miner industry is not only an important indicator. At the same time, in order to make effective profits, miners will continue to adjust the number of operations and sales as the market changes.
What the hash ribbon inversion can tell us about the current state of the mining industry.
During the expansion period, the 30-day moving average (30DMA) of mining computing power (hash rate) will rise faster than the 60-day moving average (60D), which indicates that the mining industry is expanding.
During the period when miners surrender, 30DMA will drop below the 60D level, which means a loss of mining power.
Hash Ribbon Inversions does not have a specific formula. It is an indicator based on mining power. By observing the 30-day moving average (30DMA) and the 60-day moving average (60D) relationship to determine the status of the mining market.
Imagine that Bitcoin is in a bull market, the price rises rapidly and miners buy more mining equipment to mine Bitcoin.
During the bull market, miners will invest in more mining hardware, which leads to the expansion of mining computing power (hash rate), making 30DMA rise faster than 60D.
During a bear market, when miners’ revenue comes under pressure, some miners have to shut down unprofitable mining equipment. This could lead to miners capitulating, causing the 30-day moving average (30D) to drop below the 60-day moving average (60D), forming a hash ribbon reversal.
It should be noted that the hash function area reversal indicator is usually used when the price rises or falls over a certain period of time. Whether the miners' movements affect the market cannot be used alone as the basis for investment decisions.
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