Bitcoin difficulty ribbon compression has broken out of a bear trend it has been in since the March coronavirus crash.

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.”

Chart

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.

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.

Cryptos feed

Latest Crypto News


Latest Crypto News & Analysis

Editors’ Picks

Bitcoin adoption accelerates as coiling prices hint at explosive rally

Bitcoin price faces a stiff resistance wall that has prevented weak bullish momentum from passing through. As a result, a short-lived retracement has caused a majority of the market to follow suit despite BTC’s raging adoption and interest from institutions over the past week.

More Bitcoin News

DOGE’s bullish potential appears limited amid overbought conditions

DOGE/USD eyes $0.80 amid a descending triangle breakout on the 4H chart. Overbought RSI remains a cause for concern for the DOGE bulls. Elon Musk’s Saturday Night Live appearance waited for fresh impetus.

More Dogecoin News

Ripple epitomizes relative strength, portends higher prices

XRP price confidence weakens slightly as breakout from bullish base falters. XRP/BTC pair has gained over 300% in the last eight weeks. Ongoing SEC case and the documentation production battles cast a wide shadow.

More Ripple News

Litecoin price enjoys steady uptrend, but beware of LTC warning signs

Litecoin price closes with a Doji candlestick, indicating an interruption in the trend. Significant Fibonacci level restraining rally from reaching the all-time high. Litecoin price on pace to close with fourth-largest weekly gain since September 2020 low.

More Litecoin News

BEST CRYPTO BROKERS/EXCHANGES




Bitcoin Weekly Forecast: Markets revert to mean, but BTC price remains indecisive

Bitcoin price shows considerable strength after springing from the recent crashes. Still, it is uncertain whether the current bullish impulse will morph into a new uptrend or lead to a more profound decline.

Read the weekly forecast

BTC

ETH

XRP