In this series of articles, I will discuss the most important aspects to consider when analyzing the cryptocurrency market, with a particular focus on Bitcoin, the leading cryptocurrency that drives the market. When analyzing Bitcoin, we need to consider both technical analysis and on-chain metrics, which provide a more medium- to long-term view of our current position.

On-chain metrics are indicators that analyze transactions and movements occurring within the blockchain; in other words, they measure network activity.

A crucial aspect when analyzing Bitcoin is its volatility. The two indicators I rely on are: Bollinger Bands and Bitcoin’s 7-day historical volatility indicator.

In the following chart, we can see that when Bitcoin’s 7-day historical volatility index is between 3.00 and 4.50, Bitcoin tends to experience a rally. We don’t know whether it will be upward or downward, but we do know that volatility is low. When that happens, we are likely to see a significant move soon. These points also tend to coincide with a volatility squeeze in the Bollinger Bands. To anticipate the direction of the market, we can look at other indicators such as the RSI oscillator.”

Source: Tradingview

In the cryptocurrency market, all transactions are recorded in a public ledger, and miners validate and record those transactions. Bitcoin’s hash rate is the total computational power used to secure the network. If the hash rate increases, it indicates that more miners are joining the network or that existing miners are upgrading their equipment to increase their chances of competing for block rewards. A high hash rate on the Bitcoin network suggests that the network is secure and healthy. Conversely, if the hash rate decreases, this implies risks for the network, as some miners may struggle to generate profits and shut down their mining machines.

Within on-chain metrics, in this article I will focus on Hash Ribbons. This metric identifies periods when Bitcoin miners are under distress and may be capitulating. It tracks the 30-day (blue line) and 60-day (purple line) moving averages of Bitcoin’s hash rate. When the 30-day moving average crosses below the 60-day moving average, it signals miner capitulation. In other words, Bitcoin prices may be at or near major lows, potentially indicating a buying opportunity for long-term investors. However, I would buy only after this situation has played out, that is, once the 30-day moving average crosses back above the 60-day moving average, as we can see in the following chart:

Source: Bitcoin Magazine Pro

Finally, it is also important to examine the weekly chart, which includes the 20-period Simple Moving Average (SMA, yellow) and the 50-period SMA (green). In the following chart, we can see that since 2023, the 50-period SMA has consistently been respected. At the late-August low, the price touched the 20-period SMA and bounced. Both moving averages are important for clearly identifying the short- and medium-term trends, which have been upward since January 2023.

Source: Tradingview

All of this and much more can be found in my book Investing in Crypto with Confidence: How to Analyze, Select, and Manage Digital Assets (Palgrave Macmillan), which will be released in early 2026.

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