Bitcoin Shows Local Bottom Signals as Miners Enter Capitulation Phase: Analyst

Bitcoin is flashing local bottom signals as miners enter a new “capitulation” phase, according to on-chain data.

In a February 10 post on X, analytics account Bitcoindata21 said this pattern could indicate an upcoming price rebound.

The analyst noted a “triggering” event in Bitcoin’s hash ribbon indicator, a widely recognized tool for predicting BTC price reversals at local lows.

What is Hash Ribbon Indicator?

The hash ribbon tracks miner activity by comparing the 30-day moving average (MA) of hashrate to the 60-day MA.

When the 30-day MA falls below the 60-day MA, it signals miner capitulation, meaning mining has become too costly relative to operational expenses.

Historically, such events are rare but often precede extended BTC price surges.

Bitcoindata21 noted that the capitulation phase ends when the 30-day MA crosses back above the 60-day MA, indicating renewed miner confidence.

The last miner capitulation occurred in mid-October 2024, just before BTC/USD surged past $73,800, reaching $108,000 two months later.

Analysts believe a similar price trajectory could unfold in the coming months.

Darkfost, a contributor to on-chain analytics platform CryptoQuant, described the hash ribbon as a “reliable signal” for market entries.

“This indicator has consistently highlighted optimal entry zones for both mid-term positioning and long-term accumulation,” he wrote in a February 11 blog post.

He added that except for the COVID-19 market shock, every hash ribbon signal in history has preceded a Bitcoin rally.

Despite the early signs, Charles Edwards, founder of Capriole Investments, cautioned that miner capitulation has only just begun.

“Bitcoin miners are once again growing their stack,” Edwards told his X followers, referencing Capriole data on miner netflows.

While the current signals indicate a possible reversal, Edwards warned that the true market turning point is yet to arrive.

“We all know what it means when a Hash Ribbon buy signal eventually follows,” he noted. “A lot can happen between now and then. But we are entering a window of opportunity.”

Ethereum Short Positions Hit Record High as Hedge Funds Bet Against ETH

Ethereum is experiencing an unprecedented level of short selling, with futures contracts on the Chicago Mercantile Exchange (CME) reaching a record high of 11,341, according to ZeroHedge.

The surge in bearish bets, up over 40% in just a week and 500% since last November, signals growing pessimism about Ethereum’s short-term outlook.

As reported, the amount of Ether withdrawn from crypto derivatives exchanges has surged to its highest level since August 2023, a development analysts interpret as a bullish sign for ETH’s price.

On February 6, Ether’s net outflows from derivatives exchanges reached 300,000 ETH, valued at approximately $817.2 million, with ETH trading at $2,724 at the time.

The movement suggests reduced selling pressure as traders close leveraged positions and move assets to cold storage.