Hash ribbons

Two lines on a logarithmic axis: the cyan one is bitcoin's hash rate averaged over 30 days, the violet one averaged over 60 days, in hashes a second — an EH/s is a billion billion. Most of the time the network's computing power grows, and the 30-day average runs above the 60-day one.

When the 30-day average falls under the 60-day one, miners are switching machines off faster than on, and the chart shades those weeks red: a capitulation. The green dot marks the week the 30-day average climbed back over the 60-day one, the recovery. Hovering shows both averages, whether the week was a capitulation or a recovery, and bitcoin's price then.

The chart opens on the last four years, one reading a week; the chips choose other windows or the whole record. Dashed verticals mark the halvings.

The hash rate cannot be measured directly; it is estimated from how quickly blocks are found at the network's current difficulty. Perly draws the 30- and 60-day averages of that estimate as Bitview computes them from a full bitcoin node, read once a week, and marks a capitulation for every run of weeks the shorter average spends under the longer.

Charles Edwards of Capriole introduced the hash ribbons, and he is credited under the chart. His buy signal is the recovery together with a condition on the price's own momentum. Perly marks the recovery alone and sets no condition on the price, so the green dots are recoveries, not his signal.

Capitulations have clustered after the halvings, when a miner's reward is cut in half overnight and the least efficient machines stop covering their power bills; in deep price falls; and in the summer of 2021, when China banned mining. Some last a week or two, and the longest on the record ran for months.

A recovery says miners are switching machines back on. It says nothing directly about the price, and some recoveries on the record were followed by lower prices.