The Best Bitcoin Fundamental Indicators for Price Analysis

The Difficulty Bands indicator creates different moving average (MA) bands of Bitcoin mining difficulty.

It uses different colors for the moving averages (200d, 128d, 90d, 60d, 40d, 25d, 14d) as shown in the image above. This metric is the estimated number of hashes used to mine the block.

Historically, periods of ribbon compression have been good buying opportunities. Willy Woo created the Difficulty Ribbon.

Explanation: Bitcoin miners sell some of the coins they mine to keep operations going.

The weakest miners have to sell more coins to maintain production.

They capitulate when the mining operation becomes unsustainable (they can no longer pay to maintain the operation). Bitcoin price is too low to cover the cost.

At this point, hash power and network difficulty are reduced, resulting in ribbon compression.

This pattern usually occurs at the end of a bear market cycle; after miners capitulate, prices stabilize and then climb due to a lack of miner selling pressure. This is a classic accumulation bottom.

Source of information: Compiled from CRYPTOCOINTRADE by 0x Information.Copyright belongs to the author, without permission, may not be reproduced

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