Miner Capitulation / Hash Ribbons has signaled a buy on daily suggesting that hash rate is stabilizing. Hash ribbons flipped a few days ago and today the SMA 10 crossed over the SMA 20 which is the secondary condition for a long.
Looking at a long term scope, this strategy was supposed to beat even an early buy & hold. Mostly by reducing drawdowns significantly. So I made a quick backtest to see if the number actually held up and they do. $100 invested in MC versus a buy & hold. It significantly outperformed!
Realize this is not a quick in and out strategy, as you can see average trade is held for a few months. It does accomplish the goal of reducing drawdowns though (but not eliminating them). Now all we need is a time machine to play this from 2011 onwards. :)
A lower low before total exhaustion I feel is necessary. Than a steady road upward with many bumps and twists along the way. "John Q Public" still a long way from entering and only the big feesh and the "moon boys" trading on such small levels. Plus you still have exchanges playing games; Huobi.US most recent with customers, and I feel it is still a "casino mentality" for crypto. Need a major "oops" like 2008 in the financial world to make the ball roll harder or even still the big "oops" for Black Monday 1987. Than this cypto will be like "gold". Nice charting amigo and nice to drop you a line after such a long interval.
sharkpool
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Thank You for this indicator. Could You explain on the BTC/daily MCCD has indicated a buy, go to 2 day & still in capitulation mode with no recovery or buy signal.. Is 1 more accurate then other ? Thank You again and Happy New Year
theheirophant
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@sharkpool, Well keep in mind on 2 day you are still using 30 and 60 period moving averages. So instead of the 1 month and 2 month has ribbons, on a 2D chart it will represent the 2 month and 4 month ribbons. Since thats a longer period of time its logical that those ribbons would flip in a lagged fashion compared to the 1D which is using shorter periods.
Its the classic timeframe decision compromise, longer timeframes will be more accurate but also introduce more lag and give later signals. Its really up to you to determine what model fits your risk tolerance and trading style the most!
sharkpool
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@theheirophant, Thank You very much for response and easy to understand .
dragononcrypto
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Exactly my thoughts, look at the signals the Hash Ribbons have given in the past 9 years (10), then work out if you want to bet against them with your 10% chance of being right: