Sunday, November 29, 2020
Home Cointelegraph News Bitcoin ‘difficulty ribbon’ chart hasn’t been this bullish since March

Bitcoin ‘difficulty ribbon’ chart hasn’t been this bullish since March

Bitcoin (BTC) simply needs history to repeat itself to see significant price rises, according to two indicators now flipping bullish.

On Sep. 28, on-chain monitoring resource Glassnode noted that Bitcoin’s difficulty ribbon compression had broken out of its green “buy” zone for the first time since the March coronavirus crash.

Glassnode hints at “significant” BTC price increases

Difficulty ribbon compression is based on difficulty ribbons, a metric devised by statistician Willy Woo as a way to gauge optimal times to buy Bitcoin.

Ribbons use simple moving average values for mining difficulty, contracting as miners sell BTC to balance costs and then capitulate, often at the end of bear markets. This leaves stronger miners, and price recovery and then growth ensue. 

Compression adds standard deviation to the mixture, allowing analysts to quantify ribbon compression and work out when to enter the market even more precisel

“Difficulty Ribbon Compression is trending up and broke out of the green buy zone for the first time since March,” Glassnode commented the data on Twitter. 

“Historically, these have been periods characterized by a positive momentum indicating significant $BTC price increases.”

Woo agreed, adding that difficulty ribbons were “more reliable personal favourites” among Bitcoin price metrics. He said that BTC investors should prepare for a “great Q4 2020.”

Bitcoin difficulty ribbon compression historical chart showing buy zone breakouts. Source: Glassnode

$145,000 by 2022?

Another chart doing the rounds on cryptocurrency Twitter this week is the spot volume currency index from BitWise.

Tracking periods in BTC price history from lows to highs against the backdrop of halving cycles, the chart currently gives a strong indication of BTC/USD heading upwards by an order of magnitude into 2021.

By the end of next year, if historical behavior repeats itself, the market could trade closer to $150,000 than $10,000.

BitWise spot volume currency index annotated chart

BitWise spot volume currency index annotated chart. Source: Twitter 

As Cointelegraph reported, anticipation continues to build around Bitcoin conforming to historical precedent and launching out of its current range, which has topped out at $12,500. Factors such as U.S. dollar strength are keeping optimism in check, but are at odds with network fundamentals, including difficulty, which is at all-time highs.

Popular Articles

Bitcoin returns to $18,000 as investors are mixed over what’s next for the bull run

Bitcoin is finally showing some strength after a brutal correction to $16,200 earlier this week.The leading cryptocurrency has bounced to $18,000 as of this...

Tyler Winklevoss On Bitcoin at $18k, “This is not a FOMO rally. It’s steady hands.”

Advertisement     Tyler Winklevoss the Co-Founder and CEO of top cryptocurrency exchange Gemini, says the Bitcoin rally that took the price to over $18,000 is...

New Van Eck Bitcoin Note Gives Hope to Traders

Van Eck Associates Corp. has introduced a bitcoin exchange-traded note on a German crypto exchange. The trading platform is known as the Deutsche Boerse...

Here’s the Bitcoin Price that “All the Key Levels” are Currently Pointing To

Bitcoin and the aggregated cryptocurrency market are currently pushing higher, with bulls moving to erase all of the losses that came about as a...

What Analysts are Saying About Bitcoin as It Reaches Overhead Resistance

Bitcoin is fast approaching a long-watched overhead resistance level formed in the time following its recent rejection at its $19,500 all-time highs. The selling pressure...

Introducing MoonDeFi, a New Part of Decentralized Finance

PRESS RELEASE. Centralized exchanges have been the backbone of the cryptocurrency market for years. They offer fast settlement times, high trading volume, and continually...