The price action of Bitcoin is of most concern to everyone, however, the health of the network underlying the asset can have a dramatic impact on price action, as the market has recently seen. . A massive drop in the hash rate, China’s crackdown on miners and the energy FUD all contributed to one of the worst sales on record.
This unprecedented stress test on the network resulted in a “never before” seen – not one, not two, but – three “hash ribbon surrenders in a row with no buy signal. But what exactly does this mean, and what happens when that buy signal finally comes in?
Bitcoin network gets licked, keeps spinning
Bitcoin is an asset unlike anything before it, so unique that an entire industry has since been created in its image. Each new coin is touted as the successor to the original, but nothing has yet managed to beat BTC.
The first-mover advantage made cryptocurrency a household name, and its early days of decentralization led to wide distribution and a highly secure network.
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Over time, this network only gets stronger, as it survives all kinds of stress. But this latest stress test is unprecedented.
It started in April when power outages hit China’s Xin Jiang district, where BTC mining is highly centralized. A mining ban in Inner Mongolia also contributed to the surrender of the miners. The icing on the cake was the ban on mining in China and the impact of energy FUD, which caused an anomaly in Bitcoin.
Miners are taking a beating yet still no buy signal | Source: BTCUSD on TradingView.com
Where in the world is the hash ribbon buy signal?
According to the creator of the Hash Ribbons and several other fundamental Bitcoin tools, Charles Edwards, this chaos has caused the greatest stress on the network to date.
The result is three separate capitulation signals in a row, with no buy signal – something that has never happened before in the past. Not only is there currently no buy signal on the indicator, but Edwards said yesterday that it was nowhere “in sight”.
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The price of Bitcoin has since started an attempted reversal, and that could trigger that buy signal that Edwards is talking about. This buy signal is known as the most profitable buy signal in crypto, and has resulted in some of the biggest historical rallies to follow.
A buy signal appeared before the final push to a peak in 2013 and then again in 2017. Could this next buy signal be the last in this bull market?
Featured image from iStockPhoto, Charts from TradingView.com