Bitcoin's Computational Complexity Indicator Chart Hasn't Been So Bullish Since March

Bitcoin's Difficulty Ribbon Compression indicator has emerged from a bearish trend in which itwas from the March market crash. Historically, this is a strong bullish signal foreshadowing a significant rise in prices. It is only necessary for history to repeat itself.

As representatives recently tweetedOn-chain analytics platforms Glassnode, Bitcoin's Difficulty Ribbon Compression indicator is almost out of the green buy zone for the first time since the markets crash in March.

Glassnode predicts a "significant" rise in the price of BTC

Difficulty Ribbon Compression indicator basedon Difficulty Ribbons, a metric developed by statistician Willy Woo as a possible way to determine the optimal time to buy Bitcoin.

These bands are based on simple moving averagesfor mining difficulty and shrink as miners sell BTC to cover production costs and then capitulate, often signaling the end of a bear market. This removes the weakest miners from the market, after which the price recovers and then goes up.

Compression of tapes adds complexity tostandard deviation equation, allowing analysts to quantify tape compression and even more accurately determine the optimal time to enter the market.

"Difficulty Ribbon Compression Indicatoris returning to growth and is close to leaving the green buying zone for the first time since March of this year,” Glassnode commented on the presented data on Twitter.

"Historically, these have been periods of positive momentum, which has led to a significant increase in the price of BTC."

Willy Woo agreed with this assessment, callingDifficulty Ribbons is "one of their favorite and most reliable" indicators of BTC price. According to him, cryptocurrency investors should prepare for "a great IV quarter of the year."

The Difficulty Ribbon Compression chart for Bitcoin is preparing to exit the buy zone. : Glassnode

$ 145,000 by 2022?

Another chart that has been actively discussed recently in crypto twitter is the spot volume currency index from Bitwise.

Tracking periods of BTC price history fromminimum to maximum values ​​in the context of halving cycles, now the chart gives a strong signal that the price of BTC / USD in 2021 is preparing to grow by an order of magnitude.

If the historical pattern is reproduced, then by the end of next year the market may be trading closer to $ 150,000 rather than $ 10,000.

Annotated Spot Volume Currency Index Chart by Bitwise

Expectations for Bitcoin to Repeathistorical precedent and will break out of the current price range with the upper border at $ 12.500, continue to grow. Factors such as the strength of the US dollar stifle optimism somewhat, but are at odds with the fundamentals of the network, including computational complexity, which is at an all-time high.

 

The article does not contain investment recommendations,all the opinions expressed express exclusively the personal opinions of the author and the respondents. Any activity related to investing and trading in the markets carries risks. Make your own decisions responsibly and independently.

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