The worst of Bitcoin’s 50% drop may already be behind us.
The Hash Ribbon indicator is about to signal the end of a three-month miner capitulation. One of the longest capitulations on record, according to Glassnode data.
The metric compares 30- and 60-day moving averages of hash rate and is based on the observation that bitcoin often bottoms when miners are under maximum financial stress. Capitulation occurs when mining revenues fall below operating costs, forcing less efficient miners to shut down machines and sell BTC reserves to finance electricity, debt, and overhead. This combination reduces the hash rate and adds sustained selling pressure to the market.
A recovery signal is triggered when the 30-day moving average of the hash rate moves back above the 60-day mark, indicating that miners are coming back online and network stress is easing and that time is approaching. Historically, when this crossover aligns with improving price momentum, it marks strong areas of accumulation.
Since late November, when the metric first reversed, bitcoin has fallen from around $90,000 to a low of nearly $60,000 in early February, before rebounding to around $65,000 at press time.
Such major corrections are typical during juvenile stress events. Since 2011, there have been around twenty mining capitulations, most of them coinciding with local or major lows, notably in January 2015, December 2018 and December 2022.
The hash rate, which is the total computing power securing the network, is now rebounding, signaling renewed confidence among miners.
At the same time, bitcoin is now trading below its estimated average production cost of $66,000, a level often associated with significant value, according to checkonchain data. The last time this happened was in November 2022, when BTC bottomed near $15,500.
