Bitcoin on chain analysis: Miners Index confirms market strength

Consider Bitcoin’s on-chain (BTC) indicators, more specifically hash band and difficulty band compression, to determine the health of the market from a miner’s perspective.

The Hash Ribbon MAs produced a bullish sign, which may suggest the miners’ losing streak is over. The difficulty of ribbon compression has risen above 0.05, further confirming this possibility.

Hash ribbon

The hash rate measures the computing power brought into the network by BTC miners. To mine a block, miners have to solve complex calculations. The higher the hash rate, the more such calculations are performed per second.

The hash band uses the hash rate to determine if the miners are giving up. This is the phase when the mining cost is greater than the reward. In the following table they are represented by light red and dark red.

Historically, these surrender periods have often been associated with the local low or the absolute low of Bitcoin.

The source: Glass knot

The indicator uses the 30-60 day MA for the hash rate to determine when these buyback periods end.

A bullish sign came on August 9th when the indicator changed from a light red to a darker red.

The source: Glass knot

The difficulty of bitcoin’s ribbon compression

The difficulty band is an indicator that produces a moving average band (MA) of bitcoin mining difficulty. This metric is the estimated number of hashes to mine a block.

It will be adjusted every block in 2016, i.e. every two weeks.

Hence, the difficulty slows the hash rate down by two weeks in advance, since the latter is calculated daily.

Difficulty band compression uses normalized standard deviations to quantify the values ​​provided by the difficulty band. Low values ​​(between 0.01 and 0.05) are historically representative time periods for Bitcoin bottoms.

The source: Glass knot

The index has been moving up since early July, hitting a high of 0.167 on July 28th. Although it has fallen since then, it remains above the 0.05 line.

The source: Glass knot

Conclude

Today’s on-chain analysis suggests that Bitcoin may have bottomed out and could move higher in the short term.

This can be seen at the end of the miners’ losing period, when a local or absolute bottom was marked for Bitcoin and the difficulty band compression indicator bounced up from the bottoming zone (0.01-0.05) of Bitcoin.

You can see the Bitcoin price here.

We invite you to join our Telegram for faster news: https://t.me/coincunews

Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

SN_Nour

According to Beincrypto

Follow the Youtube Channel | Subscribe to telegram channel | Follow the Facebook page