Strong Bitcoin Miners Pave Way For Bullish Price Action: Willy Woo

Strong Bitcoin Miners Pave Way For Bullish Price Action: Willy Woo

Bitcoin Analyst/Economist, Willy Woo, is known for his stellar work on signaling models and tools to aid investment decisions. Well, now he has unleashed a new metric, the Bitcoin Difficulty Ribbon.

How Difficult Can One Bitcoin Be?

The ribbon consists of several simple moving averages of mining difficulty, on timescales from 9 to 200 days. As difficulty generally goes up, the 9-day moving average will tend to be higher than the 200-day moving average.

However, when the ribbon compresses or flips, this signals a slowdown in difficulty increase or even a decrease in difficulty. These are the best times to buy bitcoin, which would seem like a nice simple indicator to use. But why should it be so?

The Theory Behind The Metric

The visualization of mining difficulty examines the effect of mining on bitcoins price. Of the new coins being mined, some are sold off to cover miners production costs. This produces a downward pressure on bitcoin price.

Weaker miners must sell more of their mined coins in order to remain operational until this becomes unsustainable. At this point, the weak miners give up, reducing the overall hashing power and potentially causing a difficulty drop.

Only stronger miners are left, who dont need to sell as many coins to cover costs, leaving room for more bullish price action.

Historically, this has happened at the end of bear markets. The lack of selling pressure from weaker miners (who have left the market) allows for price to stabilize and climb.

A similar effect can be seen during block reward halving events when a sudden drop in the coins mined occurs, yet costs remain the same.

Woos work builds on an April 2014 observation from Vinny Lingham, CEO of Civic.

Looking To The Future

One observation that Woo makes is that the current bull market (and the capitulation that preceded it) has more in common with that of 2012 than 2016.

In 2016 the ribbon compressed, but in both 2012 and 2019, the ribbon fully flipped, showing severe mining capitulation. This, in turn, led to vastly reduced selling pressure from miners, and a shorter accumulation period before price breakout.

The 2012 bull-run saw bitcoin price go from around $2.50 to an eventual top of over $1000. Which means (let me get my calculator) past performance is no guarantee of future results. But it is interesting nonetheless.

What do you think of Willy Woos Bitcoin Difficulty Ribbon Model? Let us know in the comments below!

Images via Shutterstock,, Twitter: @woonomic

The post Strong Bitcoin Miners Pave Way For Bullish Price Action: Willy Woo appeared first on

02.08.2019 / 03:20 42
New Bitcoin Indicator Based on Mining Activity Emerges, Where is BTC Heading? New Bitcoin Indicator Based on Mining
Popular on-chain metrics analyst Willy Woo claims to have developed a Bitcoin price indicator that shows good opportunities to invest in the digital
Bitcoin Price Bulls Show Up on Saturday, Push BTC Back Above $5100 Bitcoin Price Bulls Show Up on
BTC bulls continue to push the bitcoin price higher, with the market-leading cryptocurrency up 2.56 percent on Saturday as of this writing. Bitcoins
Bitcoin Price to $17K in 2020, Says Unorthodox Mining Difficulty Prediction Bitcoin Price to $17K in 2020, Says
An unorthodox prediction of mining difficulty increases puts the bitcoin price somewhere around $17,000 in 2020 due to the possible power law
Bitcoin Difficulty Drops Over 7% Bitcoin Difficulty Drops Over 7%
TweetShare While interest in mining bitcoin is declining, this has not impacted positively on interest in mining Bitcoin Cash and Bitcoin SV.
Bitcoin (BTC) Mining Difficulty Is Decreasing But Miners Are Switching Off  Whats Going On? Bitcoin (BTC) Mining Difficulty Is
One of the most direct ways to own Bitcoin is through mining, but that comes with some costs in terms of power and time. When the networks hashing
Comments (0)
Add a comment
Comment on