Bitcoin miners play an essential role in market cycles. Hence, indicators that relate to them help predict the turning points in the cycle.
One such on-chain indicator is the Hash Ribbon, which has only given one false signal throughout its history.
However, if the BTC price does not sustain the March increase, it risks invalidating the Hash Ribbon signal.
Let’s examine a few charts and see if this will happen.
Hash Ribbon Gives False Signal?
The Hash Ribbon on-chain indicator compares BTC mining costs and rewards. It states that Bitcoin miners capitulate when they face higher costs than rewards.
Light and dark red regions show these in the chart. A bearish cross between the 30-day hash rate moving average (MA) and the 60-day one marks the beginning of such periods.
Then, the bullish cross marks the end of capitulation, which happened at the end of March 2025.
This signal has historically led to a significant increase in Bitcoin’s price. As predicted in October 2024, the end of the miner capitulation sparked a violent upward movement in November.
This signal has occurred 15 times in the past ten years. Only one, June 2022 (blue circle), did not lead to significant upward movements.
If the BTC price does not begin a sharp increase, it will be just the second time the signal has failed.
It is worth mentioning that it took a while for the Bitcoin price to increase on several other signals, so the current signal is not invalidated yet.
Market Cap to Thermocap
The Market Cap to Thermocap Ratio indicates how much miners receive relative to the total value of BTC in circulation.
To create the indicator, miner fees and rewards from each transaction are multiplied by the Bitcoin price. This value, called the Thermocap, is then compared with the Market Cap.
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A value above 0.0000040 is a sign of Bitcoin overvaluation. Bitcoin has not reached this value in the current or the previous market cycle high.
However, a descending resistance trend line can connect the previous two highs, and it has rejected the ratio in the current cycle.
Considering diminishing returns, this could mean that the Bitcoin market cycle top is in.
Another possible conclusion is that miners will consistently receive less relative to the value of BTC in circulation in the future.
Bitcoin Miners Positions
Finally, the BTC Miner Net Position Change shows the 30-day change in the supply held by miner addresses. Historically, miners have exited near local tops (red circles) and have accumulated closer to bottoms (green circles).
There are exceptions to the rule, such as large selling overserved near the December 2022 (black circle) absolute bottom. However, the pattern has held most of the time.
An interesting development is that miners have stood relatively dormant since exiting positions near the March 2024 high.
They recorded another small exit at the January 2025 all-time high, but the movement has been almost nonexistent.
Thus, miners will be less critical to the BTC movement moving forward. It will be interesting to watch when miner accumulation begins again since that could signal the formation of a bottom.
False BTC On-Chain Signal
The Hash Ribbon has been a reliable indicator of BTC price movement over the past ten years.
However, the current signal could prove false for only the second time in history.
Bitcoin’s price action is bearish, and the signal will be invalid unless a sharp increase occurs soon, which seems unlikely.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
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