Bullish Bitcoin (BTC) On-Chain Signal Flips for First Time Since August 2021: Analyst Will Clemente
Popular chain analyst Will Clemente says a key Bitcoin (BTC) metric has turned bullish for the first time in a year.
Clement says his 658,400 Twitter followers that a shift is taking place for Bitcoin and its miners.
“Bitcoin’s hash band has flashed a buy signal for the first time since August 2021, marking the end of a two+ month period of miner capitulation and deep pressure on miner margins.”
Bitcoin hash tapes attempt to identify periods when Bitcoin miners are worried and may capitulate, according to on-chain research firm LookIntoBitcoin.
Clemente notes that the indicator is based on the moving average of the hash rate, which he says “is of course dependent to a certain extent on price for profitability.”
“There have been several mini-capitulation periods (see for yourself below), but overall, hash bands have been giving good signals.
I like them because they are similar to the Puell Multiple, they are simple and based on first principles around profitability for miners. This indication means that miners are reconnecting, increasing BTC’s production cost.”
While the hash bands for BTC suggest an easing of selling pressure from miners, Clemente warns that the US Dollar Index (DXY) is in a strong uptrend.
“DXY screams louder – can’t even draw a proper parabola. Looks too ridiculous.”
Popular cryptoanalyst Benjamin Cowen notes that Bitcoin has historically been inversely correlated with the US Dollar Index.
“Now a lot of times, when you see the dollar go up, it’s kind of like a wrecking ball: it causes most other things to go down. In general, you can see it as people fleeing into the relative safety of the U.S. the dollar.”
BTC is trading at $21,218 at the time of writing.
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