Hash Ribbons is a long-term signal that is used to indicate macro bottoms on the bitcoin price chart. Analysis of its historical effectiveness suggests it is an important indicator for identifying a buying opportunity.
Unlike the single SMA strategy, the Hash Ribbon works with two simple moving strategies, one 30-day moving average and one 60-day moving average. Just like the single SMA, it is also used to identify miner capitulation and possible bitcoin bottoms.
Once the 30-day SMA of the bitcoin hash rate crosses above the 60-day SMA, this tends to signal the miner capitulation’s end. Historically buying at these points have been very profitable.
Together with the 1-month and the 2-month SMA, the hash ribbon indicator system adds the 10-day and 20-day SMA to help give out buy signals when the recent buy trend momentum is more bullish. This helps to lower the average drawdown by around 2% historically.
How the hash ribbon works ;
The first thing that has to happen for a buy signal to trigger is miner capitulation. The process starts with the 30-day crossing below the 60-day, this will signal the start of the miner capitulation period. Once the 30-day crosses over the 60-day again, it will mark the end of the capitulation period, and a buy signal is likely to be near. The final piece of the hash ribbon indicator is the 10-day and 20-day moving averages. Once the 10-day crosses over the 20-day SMA, it will finally signal that it’s time to buy.
There are two things I want to highlight so you don’t get blinded by the very high average max gain to the peak.
(1) The max gain has steadily decreased to from Jan-15 until today, with no exception.
(2) We recently set a new max-drawdown, increasing the average significantly.
In defense of the hash ribbons indicator, the massive drawdown of 45% relating to the buy signal on Dec-19 happened after it reached its peak, thus I would recognize this as a valid buy signal.
Unlike the single SMA strategy, the Hash Ribbon works with two simple moving strategies, one 30-day moving average and one 60-day moving average. Just like the single SMA, it is also used to identify miner capitulation and possible bitcoin bottoms.
Once the 30-day SMA of the bitcoin hash rate crosses above the 60-day SMA, this tends to signal the miner capitulation’s end. Historically buying at these points have been very profitable.
Together with the 1-month and the 2-month SMA, the hash ribbon indicator system adds the 10-day and 20-day SMA to help give out buy signals when the recent buy trend momentum is more bullish. This helps to lower the average drawdown by around 2% historically.
How the hash ribbon works ;
The first thing that has to happen for a buy signal to trigger is miner capitulation. The process starts with the 30-day crossing below the 60-day, this will signal the start of the miner capitulation period. Once the 30-day crosses over the 60-day again, it will mark the end of the capitulation period, and a buy signal is likely to be near. The final piece of the hash ribbon indicator is the 10-day and 20-day moving averages. Once the 10-day crosses over the 20-day SMA, it will finally signal that it’s time to buy.
There are two things I want to highlight so you don’t get blinded by the very high average max gain to the peak.
(1) The max gain has steadily decreased to from Jan-15 until today, with no exception.
(2) We recently set a new max-drawdown, increasing the average significantly.
In defense of the hash ribbons indicator, the massive drawdown of 45% relating to the buy signal on Dec-19 happened after it reached its peak, thus I would recognize this as a valid buy signal.